Business Economics & Services Team (BEST)
Will Modi Administration Revive Indo-US Nuclear Deal?
After being caught in the limbo for a long time, India's effort to flag off the Indo-US Nuclear deal signed in 2008 has kicked off new hopes and equal number of concerns. The Modi administration's decision to revisit the deal has rekindled the hopes of many who pitch for augmenting India's energy production through the perceived risky route of nuclear reactors. The implementation of the landmark deal was caught up in several complex issues. The foremost among them is the lack of consensus on supplier liability in the event of an accident.
The latest thinking is that the liability has to be shared between the supplier of the equipment and the operator. Since the private sector participation is not envisaged in the initial stages of Indian nuclear roll out, the Indian government has to assume the role of the operator. Around 30 reactors which are in operation now are owned by the state-run Nuclear Power Corporation of India (NPCIL). Importantly, the foreign suppliers want to know their liability well before they take a call on investing in India. That saidi, many US companies are well poised to supply to India equipment, which can fetch them several billion dollars.
India has set a road map for investing US$ 85 billion in the conceivable future for taking its nuclear production from a low of 4780 MW to 63,000 MW. This quantum jump has to be achieved for ensuring a good cover for achieving the objective of ensuring uninterrupted power supply to manufacturing units dotted across the country.
There is no denial that anything connected with power, be it thermal, hydel or nuclear, will kick off a political debate, especially when the green lobby is taking strong roots in India. The governmental fiat seldom works in this country, if there is a massive public outcry. With the setting up of the Green Tribunal, the role of the watch dog and oversight committees have become more important. Against this backdrop, what is more important is to create an awareness among the people about the advantages of the nuclear power. The resistance being faced in Kundamkulam in Tamil Nadu was mainly borne out of the fears cast by the Chernobyl. Genuine efforts have to be made to make the people understand the exact nature,impact and the safegueards against the unlikely event of an accident.
Protectiveness should be hallmark of any implementation strategy. An insurance fund has to be created to meet the exigencies and the unlikely accidents. Also, steps should be taken to minimize the loses on account of accident. The foreign equipment suppliers are keen to know exactly what would be the quantum of their contributions in that insurance fund. Also, the liability will be cast far and wide including on the components suppliers. Should their liability be at par with the original equipment suppliers is another area that has to be decided.
Nuclear Power generation always cannot remain in the precincts of the government. Sometime down the line, the private sector has to be brought into the game. There are some corporations like L&T, which have shown interest in investing in nuclear power. Having regard to the fact that, it is a highly capital intensive sector, a serious thought has to be given for funding pattern, gestation period of setting up of the plants, the return on investment etc.
Equally significant is the possibility of import of second hand machines. A threshold age should be set for the import of such machines to obviate the possibility of India becoming a dumping ground of such machines. Stringent standards and specifications have to be laid for the import of machines.
Another important factor is the need for importing only the state-of-the-art technologies and it should be made liable on the supplier to maintain the machine sufficiently for a long time
Will Modi Administration Revive Indo-US Nuclear Deal?
After being caught in the limbo for a long time, India's effort to flag off the Indo-US Nuclear deal signed in 2008 has kicked off new hopes and equal number of concerns. The Modi administration's decision to revisit the deal has rekindled the hopes of many who pitch for augmenting India's energy production through the perceived risky route of nuclear reactors. The implementation of the landmark deal was caught up in several complex issues. The foremost among them is the lack of consensus on supplier liability in the event of an accident.
The latest thinking is that the liability has to be shared between the supplier of the equipment and the operator. Since the private sector participation is not envisaged in the initial stages of Indian nuclear roll out, the Indian government has to assume the role of the operator. Around 30 reactors which are in operation now are owned by the state-run Nuclear Power Corporation of India (NPCIL). Importantly, the foreign suppliers want to know their liability well before they take a call on investing in India. That saidi, many US companies are well poised to supply to India equipment, which can fetch them several billion dollars.
India has set a road map for investing US$ 85 billion in the conceivable future for taking its nuclear production from a low of 4780 MW to 63,000 MW. This quantum jump has to be achieved for ensuring a good cover for achieving the objective of ensuring uninterrupted power supply to manufacturing units dotted across the country.
There is no denial that anything connected with power, be it thermal, hydel or nuclear, will kick off a political debate, especially when the green lobby is taking strong roots in India. The governmental fiat seldom works in this country, if there is a massive public outcry. With the setting up of the Green Tribunal, the role of the watch dog and oversight committees have become more important. Against this backdrop, what is more important is to create an awareness among the people about the advantages of the nuclear power. The resistance being faced in Kundamkulam in Tamil Nadu was mainly borne out of the fears cast by the Chernobyl. Genuine efforts have to be made to make the people understand the exact nature,impact and the safegueards against the unlikely event of an accident.
Protectiveness should be hallmark of any implementation strategy. An insurance fund has to be created to meet the exigencies and the unlikely accidents. Also, steps should be taken to minimize the loses on account of accident. The foreign equipment suppliers are keen to know exactly what would be the quantum of their contributions in that insurance fund. Also, the liability will be cast far and wide including on the components suppliers. Should their liability be at par with the original equipment suppliers is another area that has to be decided.
Nuclear Power generation always cannot remain in the precincts of the government. Sometime down the line, the private sector has to be brought into the game. There are some corporations like L&T, which have shown interest in investing in nuclear power. Having regard to the fact that, it is a highly capital intensive sector, a serious thought has to be given for funding pattern, gestation period of setting up of the plants, the return on investment etc.
Equally significant is the possibility of import of second hand machines. A threshold age should be set for the import of such machines to obviate the possibility of India becoming a dumping ground of such machines. Stringent standards and specifications have to be laid for the import of machines.
Another important factor is the need for importing only the state-of-the-art technologies and it should be made liable on the supplier to maintain the machine sufficiently for a long time
