If it ever becomes a reality, USA-India nuclear deal a very bad one for Indian public

Financially, solar and wind energy are already becoming more attractive than nuclear. Electricity from these renewable sources cost Rs 8 and Rs 4.5 per unit respectively,according to a report by solar think-tank Bridge to India. Renewables are quicker to erect and are not as politically contentious as nuclear. In contrast, the Mithi Virdi project has run into serious opposition from local residents and farmers. If it is ever built, electricity from the Westinghouse reactors will cost Rs 12 per unit.

The ‘breakthrough’ in Indo-US nuclear deal will bleed Indians every which way, Scroll In, The taxpayer will be made to pay to cover US companies’ untested technologies and the expensive electricity they generate. Nityanand Jayaraman, 29 Jan 15

“………If American corporations are sufficiently convinced to follow through and supply nuclear power plants to India, the common man (and woman) – namely, Indian taxpayers, electricity consumers and communities that host the plants – may well get the wrong end of the stick……….

Scrapping even limited liability Indian law – CLNDA – is already weak. But American and Indian private equipment suppliers – like Westinghouse, L&T, JSW Steel and Tata Power – feel it is not weak enough. Section 17(b) of the Indian Act allows the operator to sue equipment suppliers. The Rules to the Act, however, limit supplier liability to Rs 1,500 crore in damages or the value of the contract, whichever is less. Section 46 of the Liability Act potentially exposes suppliers to unlimited tort liability under relevant Indian laws. However, under Section 17, only the operator can sue, and only if such a provision is expressly made in the contract.

Winning the suit is conditional to proving deficiencies in the material or equipment supplied or services rendered. After all this trouble, if the value of the contract with the supplier of the equipment that caused the accident is only Rs 5 lakh, then regardless of the extent of damage caused by that flawed equipment, Rs 5 lakh is all the operator is entitled to get from that supplier. A writ petition challenging the constitutional validity of the Act is pending before the Supreme Court.

The Indian government has indicated that it will do away with even this limited liability.In a twist of Republic Day irony, Obama and Modi have opted to use backroom deals and executive discretion to bypass the spirit and intent of their respective legislatures. The US president says he has found a way to exempt supplies to India from US inspections meant to ensure non-proliferation goals. In return, the Indian prime minister has suggested that a publicly funded insurance pool will be set up to indemnify foreign suppliers and cover the liability under Section 17(b). Section 46 is sought to be neutralised through a legal opinion offered by the Attorney General.

Insurance burden on Indians

Declarations by Indian and US negotiators and the cautious optimism of industry players in response to the “breakthrough” make it appear as if only a few minor issues remain to be ironed out. It is made to seem as if once that is done, US multinationals like GE will “bring good things to life” and nothing will stand between 400 million Indians without electricity and their first light bulbs.

India’s nuclear establishment too continues to exude its typical optimism, unfazed by the sorry reality of having installed less than 5000 MW of ill-functioning nuclear capacity in 60 years. ……….

Details about the insurance pool are not available yet. But if it is set up, Indian taxpayers will be made to pay to cover risks associated with GE and Westinghouse’s technologies. A Reuters report talks of a kitty of $244 million, with the government-run General Insurance Corporation of India and a few public sector companies contributing one half and the government contributing the other. The Indian taxpayer will have to pay even if the plants do not blow up. If the supplier is asked to contribute to the pooled fund, that increased project and electricity cost would be passed on to Indian consumers. Anyway you cut it, we are screwed……….

More expensive electricity

Mithi Virdi power is too expensive for most utilities to afford even without the cost implications of a pooled liability fund. What then are we to make of this pursuit of expensive, untested American reactors? Is the government really serious that Rs 12 per unit electricity will light up indigent Indian homes? Or is all this merely an orchestrated pirouette in a more elaborate Indo-US diplomatic choreography? Is this about India’s electricity future, or its aspiration to be included in the club of nuclear big boys?

Answers to these questions aside, the stalled deal, the subsequent negotiations and the dubious “breakthrough” that the media refers to offer several sobering realisations. Both Obama and Modi consider corporations and not the people of Bhopal to be the real victims of the 1984 Bhopal disaster. Both leaders agree that a nuclear disaster is real enough, and that it is a matter of bilateral priority to protect – not communities and the environment – but the operators and suppliers of nuclear equipment in the event of a disaster. As for dealing with the aftermath of a nuclear catastrophe, the heads of the two great democracies seem to contend that Indians will make do with some compensation – about $480 million – from their own tax moneys.

Nityanand Jayaraman is a Chennai-based writer and social activist and a volunteer with the Chennai Solidarity Group for Koodankulam Struggle. http://scroll.in/article/702944/The-%E2%80%98breakthrough%E2%80%99-in-Indo-US-nuclear-deal-will-bleed-Indians-every-which-way