By Michael Mariotte

India's most recent reactors at Kudankulam, still undergoing testing, were built by Russia's Rosatom.

India’s most recent reactors at Kudankulam, still undergoing testing, were built by Russia’s Rosatom.

Last weekend, as a report on Bloomberg put it, “President Barack Obama and Indian Prime Minister Narendra Modi hailed a breakthrough meant to spur a surge in civilian nuclear projects.” Bloomberg added, “Equipment suppliers are keeping the Champagne on ice.”

In this case, the devil is in the details, and the fine print of the “breakthrough” isn’t yet clear. Some believe that the deal will lead to greater U.S. involvement in India’s nuclear power program–although to be absolutely correct, there is only one U.S. reactor company anymore: General Electric. Westinghouse Nuclear is a subsidiary of Japan’s Toshiba, although it keeps the subsidiary headquarters in Pennsylvania. Others aren’t so sure the “breakthrough” will lead to anything much at all.

But that issue begs the bigger question: why should India increase its nuclear program in the first place? Our guest post is by Subir Roy, a columnist and journalist in India for more than three decades. It first appeared in the Business Standard, New Delhi, where it caught our attention. We thought it deserves a wider audience outside India. Reposted with permission.

The path-breaking 2006 India-United States agreement on civilian nuclear cooperation, which had been gathering dust because of the subsequent Indian law on nuclear liability, appears to have been taken off the shelf. One of the key agreements finalized during United States President Barack Obama’s Republic Day visit, it has four elements. India will not change its nuclear liability law; instead, it will create a government fund to address claims resulting from an accident. India will also take a fresh look at the provision of its law that permits claims made under tort law for damages caused; and the United States has given up its demand to track material supplied under the peaceful nuclear program.

Only very broad features have been outlined and, hopefully, when the details become known the Indian government will not be found to have given away where it matters. If a negative picture does eventually emerge from the details, then the question will be — what for? The Bharatiya Janata Party has high stakes, as India being a nuclear power is close to its heart — and the status becomes meaningful not just when it has the bomb but when it also has a smooth nuclear power program and is able to join bodies like the Nuclear Suppliers Group. That – and the final prize, a permanent seat at the United Nations Security Council – will happen only if the United States government is well disposed, after being able to help its firms sell nuclear power reactors worth billions of dollars to India. But they will not do so if the liability for an accident finally comes to rest on their doorsteps.

The overall reality regarding nuclear accidents is that they can cause huge damage and if power plant suppliers (American) and operators (Indian) are to be liable for claims for damages by third parties who have been harmed, these could drive both bankrupt. The size of such claims has prompted many governments, including the United States, to share the risk and the fund promised by India moves in that direction. The issue is if the Rs 1,500 crore of public money (to be put up by the nationalized insurance companies and the Indian government) to create an insurance cover for claims is not enough, then will there be a recourse to the plant suppliers? If there isn’t, and a disaster takes place, then India and its people will be left holding the baby. That will be a repeat of Bhopal — and the Indian law is the result of the memory of the great injustice done to its victims.

The case for Indian insistence on leaving intact its liability law, one of the firmest in the world, rests on United States courts’ willingness to listen to damages claimed from suppliers in the case of the Three Mile Island and Fukushima accidents, as Siddharth Varadarajan has pointed out. It is also worth asking how a car is so different from a nuclear power plant. Not only have enormous claims been allowed by United States courts for injuries caused by defective cars, United States regulators move well before victims’ claims can be pronounced upon by civilian courts. Toyota has been fined a phenomenal $1.2 billion, and investigations have been started against General Motors. The best way to ensure that equipment is designed to be safe is to raise the cost of malfunction, both through government fines for criminal neglect and court-determined civilian claims.

The key issue is if damages caused by nuclear accidents can be so huge, why go for nuclear power? It begins with the idea of a macho India that has the bomb and the persistence with nuclear power feeds into it. On the other hand, Japan after the Fukushima accident shut down all its nuclear reactors — and when they start reopening later this year, four years after the shutdown, not all of them will do so. Some will reach 40 years and will be decommissioned, a costly process. In the aftermath of the Fukushima accident Germany decided to close all its nuclear power plants by 2022. “Nuclear power [has] too many inherent risks to inflict it on us and our children,” said the German commission that went into the “ethics of nuclear power” after Fukushima.

Investment costs for nuclear power, at Rs 6-8 crore a megawatt, are about the same as for thermal power. The cost of grid-connected solar power is rapidly approaching that of thermal power. All sensible nations should work towards a combination of wind, solar and gas-based power (these plants are least polluting and can be quickly started and shut down to meet gaps). The good news is that the United States has also promised to help create a huge solar power capacity whose technology is maturing rapidly.

As for possessing a bomb, it does not enhance security. Pakistan followed quickly in India’s footsteps with its own nuclear tests in 1998 so that India’s superiority in conventional defense capability was replaced with parity in nuclear capability.

Subir Roy is a columnist and writer. He has been with leading Indian newspapers for over three decades. Publication: “Made In India: A Study Of Emerging Competitiveness” (Tata McGraw Hill, 2005)

Michael Mariotte

January 29, 2015


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Filed under: International Tagged: Bhopal, India, liability, President Obama

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