[Back in September this year, which is at its fag end now, there was a report in the media that the GoI has asked the GIC to work out an insurance scheme that would cover the liability element of the foreign and indigenous suppliers and sub-suppliers to the Indian nuclear industry. (Ref. <http://www.business-standard.com/.../n-liability-centre-asks-...>.) We had then observed: "But given the huge amounts involved, it'll, I guess, call for reinsurance by international insurance companies. There the real catch lies, or rather would lie, I'd guess." (See: <https://groups.yahoo.com/neo/groups/india-unity/conversations/topics/54670>.)
In the run up to Obama visit to India as the state guest for the Republic Day event in Delhi and as a follow up of Modi's talks with him in Washington DC earlier we have the following report on the latest developments. It says: "State-run reinsurer GIC Re is preparing a proposal to build a "nuclear insurance pool" that would indemnify the third-party suppliers against liabilities they would face in the case of an accident." This suggests that the customary reinsurance by global insurance companies, in case of huge risks to be covered, is attempted to be done away with. The report further adds: "Under the plan, insurance would be bought by the companies contracted to build the nuclear reactors who would then recoup the cost by charging more for their services." This implies that the insurance will be, for all practical purpose, "free" for the insured companies/suppliers. That would, it goes without saying, will completely negate the purpose and intent of the section 17 of the Civil Liability for Nuclear Damage Act, 2010 (see: <http://lawmin.nic.in/ld/regionallanguages/THE%20CIVIL%20LIABILITY%20OF%20NUCLEAR%20DAMAGE%20ACT,2010.%20(38%20OF2010).pdf>) which obligates the supplier, and/or sub-supplier, pay for its proven fault in case such fault leads to an accident causing damage. This (uniquely Indian legal) provision is expected to ensure that the supplier would be extra cautious about its supply. But if this provision is effectively nullified the supplier will feel no such compulsion. ***That makes things even more scary, given the fact that a nuclear power plant may very well have a catastrophic accident as graphically demonstrated by Chernobyl and Fukushima.*** The report brings out that it is not only the foreign suppliers, the US-based ones in particular, but also the indigenous sub-vendors are keen to see the back of this subject provision. In the meanwhile, after prolonged wranglings, Russia/Rosatom is now slated to deliver 12, or more, nuclear reactors, over the next 20 years even without such sops to bolster India's insane rush for nuclear power. Despite ongoing appalling performance of the only VVER-1000 nuclear reactor (supplied by Rosatom) already commissioned in Koodankulam. (Ref.: <https://groups.yahoo.com/neo/groups/india-unity/conversations/messages/55183>.) Maybe that's why it has eventually agreed to go without this further concession.] http://in.reuters.com/article/2014/12/19/india-nuclear-us-deal-idINKBN0JX1IC20141219 Exclusive - India looks to sway Americans with nuclear power insurance plan BY TOMMY WILKES AND SANJEEV MIGLANI NEW DELHI Fri Dec 19, 2014 7:52pm IST U.S. President Barack Obama smiles as he hosts a meeting with Prime Minister Narendra Modi in the Oval Office of the White House in Washington September 30, 2014. CREDIT: REUTERS/LARRY DOWNING/FILES (Reuters) - ***India is offering to set up an insurance pool to indemnify global nuclear suppliers against liability in the case of a nuclear accident, in a bid to unblock billions of dollars in trade held up by concerns over exposure to risk.*** [Emphasis added.] Prime Minister Narendra Modi's government is hoping the plan will be enough to convince major U.S. companies such as General Electric to enter the Indian market ahead of President Barack Obama's visit at the end of next month. ***Under a 2010 nuclear liability law, nuclear equipment suppliers are liable for damages from an accident*** [emphasis added], which companies say is a sharp deviation from international norms that put the onus on the operator to maintain safety. >From the 1950s, when the United States was the only exporter of nuclear reactors, liability has been channeled to plant operators across the world. India's national law grew out of the 1984 Bhopal gas disaster, the world's deadliest industrial accident, at a factory owned by U.S. multinational Union Carbide Corp which Indian families are still pursuing for compensation. The law effectively shut out Western companies from a huge market, as energy-starved India seeks to ramp up nuclear power generation by 13 times, and also strained U.S.-Indian relations since they reached a deal on nuclear cooperation in 2008. GE-Hitachi, an alliance between the U.S. and Japanese firms, Toshiba's Westinghouse Electric Company and France's Areva received a green light to build two reactors each. They have yet to begin construction several years later, according to India's Department of Atomic Energy. ***Even Indian suppliers refused to sell equipment until the law is amended or they can be sure they are indemnified against any liabilities.*** [Emphasis added.] "We are working fast to address the concerns of suppliers. We are working on a solution with the insurance companies," R.K. Sinha, Chairman of India's Atomic Energy Commission, told Reuters. "ENCOURAGING SIGNAL" ***State-run reinsurer GIC Re is preparing a proposal to build a "nuclear insurance pool" that would indemnify the third-party suppliers against liabilities they would face in the case of an accident.*** [Emphasis added.] Under the plan, insurance would be bought by the companies contracted to build the nuclear reactors who would then recoup the cost by charging more for their services. Alternatively, state-run operator Nuclear Power Corporation of India (NPCIL) would take out insurance on behalf of these companies. Sinha said New Delhi believed the insurance plan was the best option given how tricky changing the law would prove, and that the proposal should be ready within the next two months. Details of the plan have yet to be thrashed out, and Sinha said the government was considering how it would better capitalise NPCIL. ***India wants to generate 62,000 megawatts from nuclear sources within two decades from the current level of 4,780 megawatts, even as other countries shift away from nuclear energy following Japan's Fukushima disaster.*** ***GE declined to comment on the Indian proposal to offer insurance cover. Westinghouse said it needed more information before it could comment.*** [Emphasis added.] ***Areva said in a statement that the creation of an insurance pool was an "encouraging signal", and that the government appeared committed to working out a comprehensive solution soon.*** [Emphasis added.] However, India's nuclear liability regime remained open to interpretation and an Areva spokeswoman said the company needed more clarification to make the legal framework acceptable. RUSSIA MUSCLING IN One Indian company said it was ready to return to the 2,800 megawatt Gorakhpur nuclear power project in the northern state of Haryana it abandoned, once the insurance cover is in place. The insurance scheme would convince Walchandnagar Industries Ltd, which makes heat exchangers for reactors, to restart supplying equipment for Gorakhpur, managing director and CEO G.K. Pillai told Reuters. Moves to win over the Americans coincide with Russia's push to build more nuclear reactors in India. ***Earlier this month, during President Vladimir Putin's visit, Russia's state-owned Rosatom said it would supply 12 nuclear energy reactors for India over 20 years, following two it has already built in the south of the country.*** [Emphasis added.] G. Balachandran, one of India's foremost nuclear affairs experts, said Russia appears to believe it can operate with the existing nuclear liabilities law without suffering a loss. This week U.S. and Indian nuclear affairs officials, as well as representatives from the NPCIL Ltd, Westinghouse and GE-Hitachi met to advance implementation of the nuclear deal, an Indian foreign ministry official said. The group is meeting again early next month, before Obama arrives, to move the discussion forward. ***Creating the insurance scheme to help projects get off the ground is GIC's "top priority", chairman Ashok Kumar Roy said in an email, although he cautioned that the timing, coverage and level of participation were yet to be finalised.*** [Emphasis added.] (Editing by Mike Collett-White) -- Peace Is Doable -- You received this message because you are subscribed to the Google Groups "Green Youth Movement" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send an email to [email protected]. Visit this group at http://groups.google.com/group/greenyouth. 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