NPCIL can sue foreign suppliers in case of nuclear accident

The civil liability clause of the Nuclear Damage Act provides the Nuclear Power Corporation of India Ltd (NPCIL) the right of recourse and sue suppliers in case of an accident.

Foreign suppliers of nuclear power plants will have to get cover under the proposed insurance structure. There will not be any exemption for suppliers, according to Sekhar Basu, chairman of Atomic Energy Commission.

This means that nuclear power gear makers such as GE, Areva and Westinghouse will not be exempt from liability if an accident occurs, under the insurance structure proposed by the government for such plants.

However, the insurance clause is unlikely to Indian sub-contractors such as L&T as they manufacture reactor parts according to specifications of either the suppliers or NPCIL and are not directly involved.

According to Sekhar Basu, Chairman, Atomic Energy Commission, foreign suppliers will need to take a cover of Rs1,500 crore from their insurance provider while the NPCIL will also get insurance cover for a like amount.

NPCIL, however, can access the India Nuclear Insurance Pool, which will not be available to foreign suppliers.

''For Indian suppliers, the reactor and parts they provide will be to our specifications and designs. The safety of the design will be our responsibility. We will have to work the contract such that the domestic supplier is not affected,'' Basu told reporters on the sidelines of the 7th Nuclear Energy Conclave, organised by the India Energy Forum.

''The right to recourse is the only remaining hindrance to resolve the insurance issue,'' he added. ''If we put down in writing what our view is in the contract, the issue can be resolved.''

Foreign insurance cover may also involve annual check by foreign insurers, involving recurring costs.

Meanwhile, minister of state (independent charge) for science and technology, Jitendra Singh, said the Indian Nuclear Insurance Pool will cover operators' liability under the CLND Act and adequately address the liability related concerns of national as well as international equipment suppliers.