India clearing decks for Westinghouse nuclear deal

As Prime Minister Manmohan Singh prepares to meet US President Barak Obama on the sidelines of the UN Security Council summit next week, India is working overtime to close a nuclear deal with Toshiba's US unit Westinghouse.

While nuclear power is being increasingly discredited globally, the Indian prime minister continues to see it as a panacea for India's perennial power shortages, and has made atomic energy cooperation with Washington a hallmark of his tenure.

Under the proposed deal, India would contract Westinghouse for preliminary works, including information sharing, for building nuclear plants in the state of Gujarat.

"I think we're close," National Security Adviser Shivshankar Menon said on Friday. "I think they're hoping to do a pre-early works (agreement), which involves some transfer of proprietary information."

"The two sides have resolved all government-to-government permissions and understandings required for enabling commercial negotiations," he said. India and the US signed a "confidentiality agreement" last week that would allow them to share confidential data with each other.

Speaking at an event at Aspen Institute in New Delhi, Menon said the Atomic Energy Regulatory Board (AERB) will soon begin safety evaluations of Westinghouse's AP1000 nuclear reactor that they propose to sell to India. Westinghouse is already building four of these reactors in China, the first of which is expected to begin operations next year.

Trying to dampen the controversy over reports that the government may be diluting the provisions of the liability law to ease the entry of US companies, Menon said, "I was surprised yesterday to see stories that somehow Indian law will not be applicable to nuclear projects in India. Civil nuclear projects in Indian would naturally be subject to Indian laws including civil liability... whatever nuclear power parts are imported, they should meet the highest standards of safety and deliver power at competitive prices." (See: Government keen to dilute nuclear liability bill: report).

Later, foreign secretary Sujatha Singh described civil nuclear as an "important" part of the Indo-US bilateral relationship.

"Discussions are ongoing between NPCIL (Nuclear Power Corporation of India Ltd) and WEC (Westinghouse Electric Co) and it is our hope that these discussions will be closed successfully. All contracts with foreign companies are subject to the Civil Liability for Nuclear Damages act and rules."

Menon said both Indian and foreign nuclear suppliers had posed many questions. "Everybody asks, how does this law work? How will it apply and they need to know to do business."

The government, he said, was "in the process of addressing these questions with them individually and as a whole so that we also have clarity. It is our interest as well as we would not want to be surprised on how it works. We will work out those issues".

The value of the preliminary contract has not been revealed.

Indian officials say the proposed deal between Westinghouse and NPCIL would be the first time money is committed to a commercial US nuclear supplier since Singh staked his career on a civil nuclear pact with US President George W Bush five years ago.

The preliminary deal with Westinghouse would not involve putting in place nuclear equipment, so would not immediately brush up against the liability issue, Indian officials said.

Westinghouse has safety approval from US nuclear authorities for the AP 1000 reactor it wants to sell India. The preliminary deal must be cleared by two Indian committees before Singh leaves for the United States on Wednesday, Reuters said, citing two unnamed Indian officials.

"The two governments have resolved government to government permissions and understandings necessary to enable commercial negotiations between NPCIL and Westinghouse," Menon said.