Equipment makers, including Bharat Heavy Electricals and France's Areva, have made it clear that dealing with Nuclear Power Corp, which operates Indian reactors, would be impossible if the present conditions were not tweaked.
Nuclear Power Corp, the country's only permitted entity to generate such energy, is worried that after a mishap it will be difficult to fix responsibility of vendors. "It's not a turnkey contract. A nuclear project is a complex mix of 2,000 industries," company chairman and managing director SK Jain told ET. "The question is who will be sued. The damage can be due to failure of components, poor upkeep or not using original spare parts or deploying technical people," Jain said.
Industry officials say that before the liability law was introduced, nuclear plant owners had the option to indemnify suppliers but this is not possible in the new regime.
Equipment suppliers and the Nuclear Power Corp are keeping their fingers crossed as the implementing guidelines of the Act are likely to be tabled in Parliament in the ensuing monsoon session.
Minister of state in prime minister's office V Narayanasamy said the government has finalised implementation rules of the nuclear liability law. A department of atomic energy official said: "The guidelines should address concerns and it is our assurance that nothing will come to halt."
The civil liability for nuclear damage law, passed by Parliament last year, allows operator of a plant to seek damages from equipment supplier in case of a mishap. The Act has fixed operator's liability limit at 1,500 crore per event. India aims to generate 20,000-mw from nuclear projects by 2020 from the present 4560-mw.
Many components like a reactor vessel are designed by Nuclear Power Corp, which also sources raw material and carries fabrication at vendors' facility. "All this is done in presence of our company's deputed engineers. In such cases technical input of a vendor is zero. They have just rented their machinery," he said.
A BHEL official said the company would not supply equipment to Nuclear power Corp if the rules were not clear. Areva India chairman and managing director Arthur de Montalembert said the Indian nuclear liability law was not in conformity with international regime. "We are certainly keeping our fingers crossed,' he said. Alstom and General Electric did not offer comments.
Suppliers in the US want India to ratify international convention on supplementary compensation for nuclear damages. India had signed the convention weeks before US President Barack Obama's visit in November last year and promised to ratify it by November 2011. However, experts believe that India's liability law does not comply with the convention.
"Westinghouse is looking forward to India taking this important step, as ratification and adherence to convention on supplementary compensation will assure participation by the Indian and global supply chain in India's civilian nuclear programme," Westinghouse director (India business development) Balendra Sutharshan said.
Jain said Nuclear Power Corp could make provision for 1,500 crore for up to 30 years of shutting down a project but equipment suppliers said they earn a maximum of $5 million profit from a one-time deal. Nuclear Power Corp has 13,839 crore reserves. "Many vendors have said that their annual turnover is 500 crore and they will go bankrupt. There are many American, Russian suppliers who supply something as small as a valve," he said.
Suppliers have also conveyed risk of multiplicity of claims by victims under civil liability law and civil law of torts. "This is a nuisance for any company," he said.
