Now, domestic nuclear industry too protests against liability law - The Times of India
NEW DELHI: Its not just the US, France and Russia that have a problem with India's nuclear liability law. The Indian nuclear industry has asked the department of atomic energy (DAE) that the provisions of the law should not apply to their supplies for nuclear reactors, marking the first clear domestic opposition to the law. Thus far, opposition has come largely from US companies and the Russian government.
Sources said Nuclear Power Corporation of India Ltd (NPCIL) and DAE have acknowledged the opposition of Indian suppliers. No contract has been signed between NPCIL and Indian suppliers using the new law since its passage in 2010. "It is necessary to follow well-established global practices as far as liability of suppliers is concerned rather than introducing special conditions for the Indian programme. It is not possible for any supplier whether domestic or foreign, to participate in any project with unspecified or unreasonable liabilities and without any corresponding coverage through insurance," MV Kotwal, director, L&T's heavy engineering division, said.
'Follow global practices'
"Since all aspects of the manufacturing is done under close collaboration and supervision of NPCIL, the industry believes we should not come under the provisions of civil nuclear liability. NPCIL has indigenously designed and successfully operated pressurized heavy water reactors. Indian industries have reached a stage where they can not only produce equipment of the required quality, but also substantially reduce the cost of nuclear power generation," Kotwal said.
The government is in a bind. If it agrees to waive the supplier liability provision for Indian companies, it would be accused of not creating a level playing field. If it doesn't, the government would essentially be killing off its domestic manufacturing industry. One of the main ideas of India opening up to FDI in this sector is to be able to develop its own nuclear industry.
Indian manufacturers supply equipment, machines etc to NPCIL based on NPCIL design, specifications and recommended quality plans. The components, sometimes even raw materials, manufacturing process, methods of inspection are specified by NPCIL. The entire process, companies say, is carried out under close surveillance by NPCIL.
The law gives NPCIL, the operator, the right to recourse, but NPCIL can choose to waive that right. That's what the Indian companies are pushing for. An executive of a nuclear company said, "The vendor has no control over preservation and storage, erection and commissioning and operation and maintenance of the equipment supplied. The orders are awarded based on tendering process and executed in project mode. No one vendor can therefore claim the equipment supplied as their product."
Once the nuclear power plant has been built, the operation and maintenance is the sole responsibility of NPCIL. "We cannot accept liability for something that is built according to others' specifications, and maintained by them," the executive said.
For three years, Indian companies like Walchand, L&T, BHEL and Godrej & Boyce have quietly expressed shock and disappointment to the Indian nuclear establishment. BHEL even went to the extent of putting out a statement that it would not supply to NPCIL, but was forced to retract under pressure.
Until now, these companies were hesitant about taking on the government, retribution can be painful. But in the past year, these companies have discovered safety in numbers, coming together under a common platform Indian Atomic Energy Forum. The forum is led by SK Jain, who recently retired as chief of NPCIL, and its decision-making body includes top executives from Gammon, Godrej & Boyce, BHEL, MTAR etc.
The Indian companies are asking the government to take a broader view of the issue. This does not imply that suppliers get away from their responsibility for defects in supplies over the specified warranty periods as per the contracts. These aspects have been addressed in international systems, even in the CSC which India has signed. But there is no provision for supplier liability in these international conventions. In the US, they said, under the Price-Anderson Act, suppliers are covered by an omnibus provision, whereby a fund is created as a corpus for future compensation.
NEW DELHI: Its not just the US, France and Russia that have a problem with India's nuclear liability law. The Indian nuclear industry has asked the department of atomic energy (DAE) that the provisions of the law should not apply to their supplies for nuclear reactors, marking the first clear domestic opposition to the law. Thus far, opposition has come largely from US companies and the Russian government.
Sources said Nuclear Power Corporation of India Ltd (NPCIL) and DAE have acknowledged the opposition of Indian suppliers. No contract has been signed between NPCIL and Indian suppliers using the new law since its passage in 2010. "It is necessary to follow well-established global practices as far as liability of suppliers is concerned rather than introducing special conditions for the Indian programme. It is not possible for any supplier whether domestic or foreign, to participate in any project with unspecified or unreasonable liabilities and without any corresponding coverage through insurance," MV Kotwal, director, L&T's heavy engineering division, said.
'Follow global practices'
"Since all aspects of the manufacturing is done under close collaboration and supervision of NPCIL, the industry believes we should not come under the provisions of civil nuclear liability. NPCIL has indigenously designed and successfully operated pressurized heavy water reactors. Indian industries have reached a stage where they can not only produce equipment of the required quality, but also substantially reduce the cost of nuclear power generation," Kotwal said.
The government is in a bind. If it agrees to waive the supplier liability provision for Indian companies, it would be accused of not creating a level playing field. If it doesn't, the government would essentially be killing off its domestic manufacturing industry. One of the main ideas of India opening up to FDI in this sector is to be able to develop its own nuclear industry.
Indian manufacturers supply equipment, machines etc to NPCIL based on NPCIL design, specifications and recommended quality plans. The components, sometimes even raw materials, manufacturing process, methods of inspection are specified by NPCIL. The entire process, companies say, is carried out under close surveillance by NPCIL.
The law gives NPCIL, the operator, the right to recourse, but NPCIL can choose to waive that right. That's what the Indian companies are pushing for. An executive of a nuclear company said, "The vendor has no control over preservation and storage, erection and commissioning and operation and maintenance of the equipment supplied. The orders are awarded based on tendering process and executed in project mode. No one vendor can therefore claim the equipment supplied as their product."
Once the nuclear power plant has been built, the operation and maintenance is the sole responsibility of NPCIL. "We cannot accept liability for something that is built according to others' specifications, and maintained by them," the executive said.
For three years, Indian companies like Walchand, L&T, BHEL and Godrej & Boyce have quietly expressed shock and disappointment to the Indian nuclear establishment. BHEL even went to the extent of putting out a statement that it would not supply to NPCIL, but was forced to retract under pressure.
Until now, these companies were hesitant about taking on the government, retribution can be painful. But in the past year, these companies have discovered safety in numbers, coming together under a common platform Indian Atomic Energy Forum. The forum is led by SK Jain, who recently retired as chief of NPCIL, and its decision-making body includes top executives from Gammon, Godrej & Boyce, BHEL, MTAR etc.
The Indian companies are asking the government to take a broader view of the issue. This does not imply that suppliers get away from their responsibility for defects in supplies over the specified warranty periods as per the contracts. These aspects have been addressed in international systems, even in the CSC which India has signed. But there is no provision for supplier liability in these international conventions. In the US, they said, under the Price-Anderson Act, suppliers are covered by an omnibus provision, whereby a fund is created as a corpus for future compensation.
