CPI asks govt to explain why it rushed into nuke agreement

New Delhi: The CPI on Tuesday asked Prime Minister Narendra Modi to explain why the government "rushed" into an agreement with the US on the nuclear liability issue, saying a proposed insurance pool to cover American nuclear firms would violate Indian law on the issue.

"If media reports on this issue are correct, and the Government has agreed to form an insurance pool backed by public sector Indian companies to indemnify American suppliers, then this would violate both the letter and the spirit of the 2010 (nuclear liability) law," party's national secretary D Raja said.

In a letter to the Prime Minister, he said US suppliers "should obtain insurance from international insurance companies at commercial rates. Why are they unable to do so? Is this because they are unable to persuade their own companies that their reactors are as safe as they claim?"

"Why should the Indian people have to provide insurance to American companies through an Indian public sector company," he asked.

Expressing concern over reports that Modi government has agreed to US demands that its companies be protected from liability for accidents caused by design defects in reactors they supply, Raja said the intent of the Indian law was "clearly to place some liability on the supplier. This was meant to ensure that multinational suppliers would pay adequate attention to safety standards."

Observing that design defects have contributed to nuclear accidents including those at Three Mile Island, Chernobyl, and Fukushima, he said US firm GE had "designed the Mark 1 reactors that were involved in the Fukushima accident."

"Why is the Indian agreement rushing into a deal to purchase a reactor that is running into difficulties elsewhere," Raja asked.

"Your negotiations with President Obama have been opaque, and very few details are publicly available. ... I hope that you will take urgent steps to address and answer them publicly," he said. "Japanese (Fukushima) victims have been unable to hold (US firm) GE to account because of the Japanese liability law which indemnifies the supplier. It was to prevent such an eventuality that Clause 17(b) of the Indian law allows the operator a right of recourse against the supplier," the CPI leader said.

It was only after the Bhopal gas disaster experience, the Supreme Court had formulated the 'absolute liability' principle under which all parties involved in running a hazardous enterprise would be liable for damage caused to the public, he said.

"I understand that there are only two reactor designs on offer by US companies - the AP1000 designed by Westinghouse and the ESBWR designed by GE."

"Neither of these reactors is in commercial operation anywhere in the world. In fact, the ESBWR is so new that even its design was certified only recently by the US Nuclear Regulatory Council," Raja said.

Observing that India would therefore be one of the first countries to have the ESBWR, he asked the Prime Minister: "Have you obtained any guarantees from President Obama, that the cost of such delays will be borne by GE and not the Indian Government?"

Raja also expressed concern over the cost of electricity from the proposed American reactors and said the two AP1000 units being constructed in Vogtle (US) were initially projected to cost USD seven billion each.

"If one uses the same cost per unit of installed capacity for the ESBWR, then this would suggest that it may cost as much as USD 10 billion," he said, adding this would translate into a cost of electricity that exceeds Rs 15 per unit, "much higher than the tariff from competing sources."