End User Agreement : India's capitulation to US interests ?

[negi]

This is a very tricky taapik, specially when we are talking about a hypothetical situation . Before we even comment on the 450 m USD figure the jingo in me is more interested to know about the manner in which the reactors would be constructed i.e. if the raw materials,labor are to be sourced from India then to be fair India Inc. too would have to share the liability amount ?

I believe when one talks about setting up a nuclear power plant there is substantial infra and hardware involved apart from the nuclear core itself and if India Inc gets valuable business by contributing to the former the effective cost of the reactor for the GOI would come down , taking this into consideration the liability clause does not look as bad as it is being made out to be.

JMT.

[samuel]

But the point is a ceiling on what they pay up is being decided now. That makes total sense in a seller's market, like with a solitary russia, but are we in a seller's market with so many countries ready to line up to do business with us? Wasn't one of the points that "we don't have to go to usa if we don't want to", "we don't have to go to Russia if we decided not to" but ultimately we are deciding to take on the risk, right? And that was just as if kaha suna maph?

What is the inherent risk here? Chrenobyl caused damage over 200,000 sq-km. The population density of india is $349/km^2$ that's approx 69, 800, 000 people affected. Assuming a mayawati rate of Rs. 50,000 per head per year over 20 years average (till they die), survivors costs that's $1, 396, 000, 000, 000 at Rs. 50/$. How will we bear this, admitting that this is only a rough calculation? If we assume a return period of 1 in a 1000 years of this type of disaster, are you telling me a company making nuclear reactors can't get insured for say 1.3 billion dollars per anum? Come on. And what happens when India becomes economically better, even mayawati pays more then. Are we out to screw ourselves further, then?

[arnab]

But the point is a ceiling on what they pay up is being decided now. That makes total sense in a seller's market, like with a solitary russia, but are we in a seller's market with so many countries ready to line up to do business with us? Wasn't one of the points that "we don't have to go to usa if we don't want to", "we don't have to go to Russia if we decided not to" but ultimately we are deciding to take on the risk, right? And that was just as if kaha suna maph?

What is the inherent risk here? Chrenobyl caused damage over 200,000 sq-km. The population density of india is $349/km^2$ that's approx 69, 800, 000 people affected. Assuming a mayawati rate of Rs. 50,000 per head per year over 20 years average (till they die), survivors costs that's $1, 396, 000, 000, 000 at Rs. 50/$. How will we bear this, admitting that this is only a rough calculation?

Well IMO this is a chicken and egg problem. Unlimited liability deters entry. I might be really keen to do business with you but not if the risk (however minimal) involved losing my home, savings, mortgaging my family etc. So if rest of the world does not enter, then we are back to the single vendor problem.
Second, how does GOI determine liability in the event of a BARC designed reactor causing damage? Do we know whether it would be > or < than $450 million?
I do not know how the $450 m has been arrived at. Perhaps it has been acturially determined. US cos can buy insurance to that amount and enter the market. GOI can ensure that stringent safety measures are introduced for all operating reactors. So hopefully that $450 m would never be required.

[samuel]

It's possible, likely, my logic is faulty. For example, a company's liability will not pass to its country. The US won't pay a dime for GE's problems. So there is a limit on how much GE can pay irrespective of the actual damage. That then suggests to me that we ought to auction liability so the party willing to take on the most gets a bid. Why set a ceiling this way?

S

[arnab]

The Federation Council of Russia has ratified the Vienna Convention on Civil Liability for Nuclear Damage. In spite of the Convention, underlines Sergei Antipov, deputy head of the Federal Agency for Atomic Energy. Russia, which is the legal successor of the Soviet Union, should not have to compensate for the damage inflicted by the explosion at the Chernobyl Nuclear Power Plant. Because the disaster took place before the ratification and it was on the territory of another state.

The Convention, which was signed by Russia in Vienna in May 1996, is one of the basic international legal documents regulating the liability regime and the procedure for paying compensation for the damage done by incidents at civilian nuclear facilities. 26 countries have signed the Convention.

Mikhail Margelov, chairman of the International Committee of the Federation Council said: "The Convention is a fundamental international legal document in the sphere of civil liability for nuclear damage resulting from incidents at civilian nuclear installations. The Convention provides for the payment of compensation for nuclear damage by a court decision.

Mr. Margelov stressed that in accordance with the document the amount, type and conditions for insurance are determined by the Installation State. If there is a lack of insurance assets to sustain nuclear liability claims, the payment shall be guaranteed by the state, with the maximum sum not exceeding $60 million.

"The Convention does not touch upon compensation for nuclear damage caused by an act of terrorism," Mr. Margelov stressed.

http://www.chernobyl.info/index.php?use ... =454&lID=2

[negi]

I believe calculating liability based on a worst case scenario due to a radiation fallout/leak from a nuclear power plant is not a 'practical' approach.

1. Lets be honest if there is one thing which has been rehashed time and again by the NPA's and greenpeace folks against nuclear power it is 'SAFETY' ; and if for all practical purposes if we assume that the probability of failure of a nuclear power plant is no more or less than say a thermal power plant it is the after effects of an accident involving a nuclear power plant which are projected by the NPA .But this is the 'calculated risk' which a energy hungry country like ours needs to take .

My point is lets not look at the figure arrived at for the liability coverage in isolation ; there are several other areas where GOI can ask for concessions from the suppliers viz, free training of engineers and technicians when it comes to safely operating the reactor and given the nature of accidents which have taken place in the past in nuclear power plants across the globe it is evident that quality training and following set procedures will be far more valuable than any sort of liability coverage .

All in all this hyper emphasis on liability sum should not influence our # 1 priority i.e. cheap and sustainable energy .

[samuel]

but that's the rub isn't it. one disaster and it is neither cheap nor sustainable. there are various useful ways to quantify risk. we for example have studied the risk of storms hitting nuclear plants in the us, where the demand from nrc is to make the structure robust to a 1/100000 year storm. guess who carries the liability for that?

[enqyoob]

Where is Sanku, I wonder...

wouldn't simple be; if you are at fault, you stand and be judged by our law.

If hanky-panky is shown, I think the limits are entirely different, hey?

I think $450M is small as a limit for a nuclear accident. Even entertainment satellites are insured to some $2 or $4 Billion, so it is not impossible to get insurance coverage for such amounts. However, should nuclear safety be guaranteed by insurance companies?

The reciprocity issue is a key consideration, IMO. Does the US have liability limits in such things? Is this new scam that is mentioned above with the $60M limit, also applicable to US? I would hope that this Bill is part of the "this is how it is done in US, pls rationalize ur laws to be standard" policy, in which case the same limit should apply inside the US. If they don't push for this, I am with Sanku in about "SELLOUT!"

Jingo log need to think a bit into the future. The projected market demand for nuclear reactor pressure vessels is way beyond the capacity of the surviving manufacturers (mostly Nipponese). As I heard it from desi new clear experts (quasi-ophishial kind) India has the inside track in becoming the world's No. 1 manufacturer (read Supplier) of reactor vessels. Now this "Supplier liability" issue takes on new significance. Will Indian-supplied reactors at new US plants enjoy the same protection?

Also, even if the reactor insides are supplied by Amirkhanis, it makes sense to build the reactor vessel nearby in India. And most accidental releases of radioactivity happen when the stuff leaks out of the reactor vessel, so the vessel supplier is right on the frontlines to get sued. There is good reason for desi industry to demand such a liability cap, in order to become competitive.

But of course the national interest should be defined more carefully than by what the mafia or the industry mughals want. It should be defined by what The Pumpkin demands.

[Sanku]

What do u think would be a fair solution to this issue?
...
I look forward to seeing responses to this.

Here is Sanku

Fair solution? -- Two things
1) Legislate the responsibility of the supplier of nuclear equipment as well, keep the amount high (say 2x the money paid)
2) Considering a extra-national charter of such transactions, have a signed agreement with the supplier backed by the suppliers govt agreeing to supply under Indian laws at that point of time. Something that can be taken to ICJ
3) (2) is a weak solution -- add it by turning the payment into a lease-purchase model, i.e. pay a little every year and not everything in one shot. If something goes wrong the payment is forfeit.

Thats the mechanics of ensuring reliability, yes there will have to be some rather acrimonious debate when things go wrong as the supplier would blame the operator but that is how things are anyway.

Please note the above is a entierly doable exercise which defrays the operators issues and shares it with the supplier. After all they are supplying an equipment and should be responsible when it fails too. Very fair onlee no?

Also note that I came up with that mechanics without being a skilled in this field, those who are in the biz of drawing up such legislation and contracts within those can do a much better job.

However there are more than one issue mixed up here (in your post) some in my opinion have no bearing what so ever to the above.
1) Suzlon selling in west -- sure have it governed by their laws of meeting responsibility on quality of delivery, yes it should be no complaints there. However the exact mechanics of wind turbines can be safely expected to be rather different since they don't go "boom" or even when they do, all that dies are a few birds. BTW what makes you think Suzlon does not have to work with such rules when it sells in the west, I have a couple of YEE YEE TEE classmates in GE and other such energy companies doing such things and the contractual obligations they tell me about certainly includes fees for f**** up.

2) The many other issues of court jurisdiction etc that you bring up are in general issues. They have been highlighted because of the law, but are not restricted to it. Many of those issues need ironing out sure, but it is a fallacious argument that we must clean up 100 years of judical practice and laws before we can frame a new one correctly. This reminds me of the Deewar Dialogue where AB goes on and on about "phele uska sign le kar aaooo" (have him sign first) Let us at least try and do the things that we can do right, right.

-------------

Ensoi --
Haan, mai sign karoonga, lekin pehle uss aadmi ki sign le ke aao, jisne mere baap ko chor kaha tha; pehle uss aadmi ka sign le ke aao jisne meri maa ko gali deke naukri se nikal diya tha; pehle uss aadmi ka sign le ke aao jisne mere haath pe ye leekh diya thaa, Uske BAAD, uss ke baad, mere bhai, tum jis kaagaz pe kahoge uss par main sign karoonga

[RajeshA]

Ensoi --
Haan, mai sign karoonga, lekin pehle uss aadmi ki sign le ke aao, jisne mere baap ko chor kaha tha; pehle uss aadmi ka sign le ke aao jisne meri maa ko gali deke naukri se nikal diya tha; pehle uss aadmi ka sign le ke aao jisne mere haath pe ye leekh diya thaa, Uske BAAD, uss ke baad, mere bhai, tum jis kaagaz pe kahoge uss par main sign karoonga

I watched Deewar a couple of weeks ago! One of my favorite films! I don't watch that many!

Sanku ji,
You are appropriating the title of angry young man for yourself, with some justification. Keep up the good work!

[Sanku]

Thank you Sirjee, but I always fancied myself more as Sashi Kapoor type.

Meanwhile I had made some predictions before
1) US is going to do nothing about Kalam's discomfit (and neither would GoI) -- check

and then I said
2) IAF views are not going to be important in MRCA deal (or any other purchase)
http://www.bharat-rakshak.com/NEWS/news ... wsid=11094

"Strategic issues may influence the decision as the Cabinet Committee on Security will take a final call based on political and strategic considerations. The winner of the 126 combat aircraft contract need not necessarily be the lowest bidder," senior IAF officials said.

Check

[enqyoob]

I can't counter that simple SankuLogic. I don't see why the supplier does not have ANY liability under the proposed Bill. As for the MRCA, my take is that it is an error to buy Oiropean - their tricks are worse than those of amirkhana and the plane is not that great. Oiropean helicopters are advanced, but the fixed wing fighters are so-so. What is the real IAF experience with Jaguars and Mirage2Ks? Somewhere I seem to remember seeing the M2Ks described as hangar queens, and the Jaguars as underpowered and ineffective. In Kargil, the M2Ks with LGBs helped de-verminize the peaks, IIRC.

The eph charsauchaudah injin is good and worth getting for mass production (lot of commercial potential as well) but the eph-atharah or eph-solah are ancient models, too old to start buying in 2010. Then again, 126 is a small number, so it may be that this MRCA is just a stop-gap towards building a large force using the Kaveri-67 engine which should be ready for high-altitude trials in Russia by 2050.

The Russian offer has excellent aerodynamics, but their engine technology lags amirkhanan. Is it true that the Russians are chalta-hai about indi-genius mods to Russky MiGskys and Sukhoiskys? f so, this is the best development/advancement path, provided the Su-30MKIs injun tech and beyond are inducted and assimilated.

Getting a fleet of USAF/USN-compatible MRCAs implies a very deep strategic alliance with amirkhan. This must come with a very firm commitment to jointly solve the Pakistan Problem, and put up a united front to push the Pee All See out of Tibet and Myanmar, and clear the sea lanes. I don't see that level of alliance developing in near future, so then one must ask why go and buy 1970s fighters for 2010 and beyond. Now if Amirkhan were offering F-22s or F-35s it would be different.

BTW, I wonder what happened to the "sixth gen Russian fighter" with the forward-swept wings etc?

Now for a note on Contract Negotiations, PeeAllSee Style

[John Snow]

Quote:
"Strategic issues may influence the decision as the Cabinet Committee on Security will take a final call based on political and strategic considerations. The winner of the 126 combat aircraft contract need not necessarily be the lowest bidder," senior IAF officials said.

It always been "strategic considerations" that determine the final awardee ( I use the word awardee deliberately and calculatedly ) of contracts with commisions and without omisions.

No surprise at all

But one must remember that the operative word "Strategic" also implies strategic for the party in power and all in the process.

From Jeep Scandal, to bofors, to Deva Ghoda T-90s to Bodybags to MRCA.

The only saving grace is our babus and forces (used to select, I can not say about future) always picked something reasonable, workable and suited for ID parades.

[amit]

It always been "strategic considerations" that determine the final awardee ( I use the word awardee deliberately and calculatedly ) of contracts with commisions and without omisions.

No surprise at all

But one must remember that the operative word "Strategic" also implies strategic for the party in power and all in the process.

From Jeep Scandal, to bofors, to Deva Ghoda T-90s to Bodybags to MRCA.

The only saving grace is our babus and forces (used to select, I can not say about future) always picked something reasonable, workable and suited for ID parades.

Snow ji,

As I told you before on some other thread. We're doomed and deservedly so.

So no point fretting. Even Purefool agrees that we're doomed.

Says Praful Bidwai, writer and a member of the Coalition for Nuclear Disarmament and Peace, told Outlook, “This is being done under the combined pressure of the US and Indian industry, both of which are keen to get a share of the Indian civil nuclear energy pie.” However, the Department of Atomic Energy (DAE), responsible for formulating the proposed legislation, says putting a cap on compensation is an international practice. The reason, say DAE officials, is simple—a nuclear accident can cause colossal damages and raise demands for inconceivable compensation amounts. Typically, insurance companies are not willing to underwrite unlimited compensation. Consequently the cap.

The signs are indeed ominous for India.

Purefool has become a much quoted "anal-lyst" on BRF. Ghor Kalyug!

[Sanku]

Amit Saar, even a broken clock is correct twice a day. Lets leave purefool out of this.

[Sanku]

I can't counter that simple SankuLogic. I don't see why the supplier does not have ANY liability under the proposed Bill.

[Raj Malhotra]

Most of the Political decisions have been way better than so called technical evaluation committee decisions of Services. What you must understand that politicians DON'T need to favor anybody to get bribes. Anybody who wins HAS to pay bribes otherwise contract will not be signed and will be re-tendered. Mostly it is lowly babus (and I regret to say this by some Service brass) who need to play favorities.

Compare political decisions like An-32, T-72, Tu-142, Il-76, Brahmos, Su-30MKI, Arihant, Bofors gun, HDW

Services- Hawks, repeated retender of 155mm guns as all of them fail repeatedly, Tunguska, etc

[vasu_ray]

what kind of liability exists if TSP/PRC hit these civilian reactors and cause subsequent explosion/radiation leaks? are they just war causalities?

[RajeshA]

what kind of liability exists if TSP/PRC hit these civilian reactors and cause subsequent explosion/radiation leaks? are they just war causalities?

Then we go and beat the shit out of them and get the money.

[negi]

Amit Saar, even a broken clock is correct twice a day. Lets leave purefool out of this.

Yes ;fwiw purefool's article is on expected lines he would have come up with one or the other excuse to oppose reactor construction of any sort 450 million or 10 billion he has his NPA credentials to flaunt.

[enqyoob]

Vasu_ray: Insurance against "act of war", is very difficult, IIRC. Ship insurance MAY be an exception, but the cost goes sky-high. I don't know if terror attacks come under this category, unless phoren involvement is proven, and since in India, all terrorism is by yindoo extremists or raw-backed Balochis per the guvrmand, this is not a problem.

[amit]

Amit Saar, even a broken clock is correct twice a day. Lets leave purefool out of this.

Sanku ji,

Thank you for that interesting insight to your thought process.

I'm now forewarned that it's not a good idea to depend on you to give me the accurate time of the day! I certainly have no intention of becoming a Purefool!

[amit]

Actually, I'm quite intrigued by the new twist the discussion has taken in this very interesting thread which for 16 pages was discussing one issue while pretending to discuss something else.

While US$450 million seems really a small amount I would guess we could scream "daylight robbery" (or whatever one is supposed to scream after getting conned) if we could prove that - God forbid - if there's an accident at a Russian or French N-power generation site that we'd get substantially more than the US$450 million.

Is there such conclusive proof that's the case?

I personally haven't seen it but I would certainly be grateful if someone could point me out to evidence of that if it exists. Then I will certainly change my POV on this issue.

Right now I look at the whole issue from a slightly cynical point of view. And that is at least we know what kind of monetary compensation we'd be looking at (however inadequate) if there's an accident at a US N-plant. Do we have such a figure for the French or Russian plants?

Or is it a given that the US have the most accident prone tech while the French and Russians can never go wrong?

I'm afraid the entire discussion is again going back to what was the shadow argument on this thread about EUMA. And that is don't buy American under any circumstances because we (meaning individuals) don't like them!

The only problem is nobody is willing come forward and say this openly. And hence all these dialectics about (adequacy of) monetary compensation, trustworthiness of the AmeriKhans, support for Pakistan (the French are only good at being good Frenchmen, so they don't count - caveat emptor) etc are doing the rounds.

Folks I would request you to say it as it is and not beat about the bush.

Please see: There's one readymade solution to this whole issue. And that is don't buy foreign N-power plants! Go only Indian or better still go don't go for N-power at all. India produces enough bio-gas to take care of all electricity needs for the next 10,000 years at least. You see I've realised that Bidwal isn't a (Pure)fool any longer - his clock has been fixed by some folks on BRF!!

[Sanku]

Amit Saar, even a broken clock is correct twice a day. Lets leave purefool out of this.

Sanku ji,

Thank you for that interesting insight to your thought process.

I'm now forewarned that it's not a good idea to depend on you to give me the accurate time of the day! I certainly have no intention of becoming a Purefool!

Amit Saar, you do have a penchant for making everything personal don't you. I suppose some one who has no valid points to discuss indulges in these petty debates. You sound very much like the Chinese drones whom you claim to hate, albeit one with slightly different conditioning.

[Sanku]

Most of the Political decisions have been way better than so called technical evaluation committee decisions of Services. What you must understand that politicians DON'T need to favor anybody to get bribes. Anybody who wins HAS to pay bribes otherwise contract will not be signed and will be re-tendered. Mostly it is lowly babus (and I regret to say this by some Service brass) who need to play favorities.

Compare political decisions like An-32, T-72, Tu-142, Il-76, Brahmos, Su-30MKI, Arihant, Bofors gun, HDW

Services- Hawks, repeated retender of 155mm guns as all of them fail repeatedly, Tunguska, etc

Raj Malhotra, over the years I am aware that you think the service view of acquisition is flawed, but that post is really so inaccurate in so many ways in the given context

1) The post I made had nothing to do with bribes. Its a total extraneous angle which has nothing do with my point.
2) There is NO deal which is either pure services anyway, the way it works is
a) Services/Security establishment put forth a threat perception and relative balance of forces
b) They put forward a acquisition plan to meet their tasked goals
c) If the above is approved by Babucracy and political angle we get into the aquisition step
d) The service then do a technical evaluation of the product and sends its report up
e) The Babucracy then takes over the negotiation/purchase part.

The fun part here (in the context mentioned) is that the IAF has publicly already said that the choice will be determined at step (e) more than step (d) which is usually the case the case (i.e. force views are given some importance)

Please note that the issue here is not whether Services make better choices or not (In my opinion they never chose they merely pass along their studies based on the parameters) but how much of Services opinion in terms of relative usefulness of different platforms is going to count vis a vis the Politico's preference.

Finally --> I totally disagree with your classification and judgment of the acquisition process in the post, however thats OT. At some point somnath had started (lets bash the services) a thread under the name improvement in Mil planning or something like that. We can discuss it there or some other thread appropriate for that purpose.

[Sanku]

Right now I look at the whole issue from a slightly cynical point of view. And that is at least we know what kind of monetary compensation we'd be looking at (however inadequate) if there's an accident at a US N-plant. Do we have such a figure for the French or Russian plants?

Dear Amit, what are you babbling about? The law in the question has nothing to do with American, French or British. In fact since it talks about ONLY the operators it completely leaves all the phirangi's out of the ambit.

The issue why this helps the Americans more than others is outlined as follows. (from the previous article ALREADY QUOTED)

Why do critics feel the bill favours American companies?

Unlike the French and Russian firms, which are either fully or partly owned by the government, the US companies are all privately owned. Had the supplier been made liable, these companies would have found it difficult to get an insurance cover—even for a compensation of $450 million. In contrast, French and Russian companies have their governments to bail them out. Without this legislation, American companies would have been muscled out.

Personally I think it would be fine to re evaluate your thinking based on the information present, there is no harm in changing your mind you know if the facts are different. Its a perfectly valid exercise, being stuck with a POV is a trait of Chinese drones and not us Indians.

[amit]

Dear Sanku ji,

Instead of comparing me to a Chinese Drone twice in 2 posts (yes yes I know that's not a personal attack which you detest) could you answer my rather simple question?

And that is, is there any verifiable evidence that in the unlikely case of a major accident in one of the French or Russian made reactors the unfortunate victims would get more than the pitiful $450 million in compensation?

And yes I know the French and Russian firms are govt linked.

[Rahul M]

can this (otherwise useful) discussion PLEASE be conducted without acrimony ??

otherwise please put each other on ignore.

[Sanku]

Dear Sanku ji,

Instead of comparing me to a Chinese Drone twice in 2 posts (yes yes I know that's not a personal attack which you detest) could you answer my rather simple question?

Dear Amitji, please dont start personal attacks if you want to have a discussion without one, fair enough? You cant have your cake and eat it too.

And that is, is there any verifiable evidence that in the unlikely case of a major accident in one of the French or Russian made reactors the unfortunate victims would get more than the pitiful $450 million in compensation?

With this law, there is obviously ZERO chance since it explicitly leaves the suppliers out the ambit. That part is simple right? I don't see any confusion there.

The second part is hypothetical -- assuming that suppliers had a 450$ (or X) million responsibility and they also inked a deal with that clause are you saying that they would have defaulted anyway and not paid up? And GoI would twiddle its thumbs?

Well Sir, I have no verifiable evidence of what the French or the Russian behavior (or GoI) behavior in future will be. You see Sir, its the FUTURE I can not have verifiable evidence for that since I don't have access to time travel.

However if you ask me whether I expect that a French or Russian agency which has the formal backing of their country will live true to their commitments? Yes I fully expect that. Is it backed by the past experience (Russia paying us for delay in Talwar) Yes. Is it verifiable? NO.

[Sanku]

can this (otherwise useful) discussion PLEASE be conducted without acrimony ??

otherwise please put each other on ignore.

Rahul M I am reporting a post right now. Please look into it My point is simple, I dont want acrimony either, but it has become an habit for some to personally insult me and then claim that the discussion should not be acrimonious.

Its like being a marked man on the football field, it does get a little bugging you know.

[amit]

can this (otherwise useful) discussion PLEASE be conducted without acrimony ??

otherwise please put each other on ignore.

Rahul Boss,

You don't need to worry. I fail to see any point in continuing a discussion with this poster. And in any case I wasn't talking to him, he barged in with a response to a comment I made to John Snow in jest. I think you'd notice that John did not bother to respond because really it wasn't worth doing so.

However, I would really be interested if someone were to respond or debate on the points that I raised.

To effect that, while the US$450 million is a pitiful sum, have the French or Russians given an assurance that they'd give a bigger amount of compensation in case, again God forbid, if there's a nuclear catastrophe. What kind of compensation did the Russian provide for Chernobyl, the world's biggest nuclear accident?

That apart, my reading is this: Till now the liability angle was a sort of discrimination against the participation of the two private US companies. And thus we essentially had a two horse race in the nuclear plant market between the French and Russians. With this clause we now, potentially have four bidders for the reactors we'll build and/or operate. Now to me four bidders instead of two seems to weigh the scales in favour of the buyer. I could be wrong and would be happy if someone could prove that to me.

However, the game changes if it can be shown that by limiting the liability to the US$450 million we actually scored a self-goal because otherwise the potential of compensation was much higher then that would be something totally different. I'm trying to understand all the implications.

And Boss, I addressed this post to you because I don't want the discussion to get derailed again and yet I'd like to hear other viewpoints.

JMT

[Sanku]

Dear Amit; in case you did not notice it so far, this is a public forum, I am free to respond to any post. If you are keen to have a one-o-one with Snowji please use e-mail, I am sure all know how to use it and Snowji may want to talk to you there too.

Till then I will be free to say what I think of any topic or post as long its civil.

To effect that, while the US$450 million is a pitiful sum, have the French or Russians given an assurance that they'd give a bigger amount of compensation in case, a

Dear Amit, we are at the stage of drafting domestic laws, what is the need to bring in the "log kya kahenge". Also the main issue here is not whether 450$ M is enough or not, the major issue is that suppliers are given no responsiblity.

That apart, my reading is this: Till now the liability angle was a sort of discrimination against the participation of the two private US companies.

If the angle that "suppliers have to be responsible" becomes a discrimination against one party, the solution is for the party to fix itself. The solution is not that we hurt our interests by letting all those whom we are buying from off the hook.

This is a clear case where the "liability of a particular supplier" is considered a discrimination, then the person drafting the law is thinking of the supplier and not his own interests.

----

You have by now made three posts with patently incorrect assertion, i.e. the focusing on the amount of liability instead of the party of liability.

In interests of the quality of discussion on the forum I would request you to correct your facts, otherwise its like discussing the distance of mars while discussing the moon mission.

[Philip]

While we surrender to Pak and agreeto the humiliation of the EUM,the US just keeps on arming Pak..
The US gifting Pak a frigate with ASW capability and a $65million upgrade to fight...pirates"! This US frigate in Paki clours will be aprt of the US's "1000 ship navy" of the US and ita "allies" to fight its enemies worldwide.

U.S. to transfer frigate to Pakistan navy
By Lisa M. Novak, Stars and Stripes
European edition, Friday, August 7, 2009

Courtesy of U.S. Navy
The USS McInerney is slated for transfer to Pakistan following decommissioning from the U.S. Navy next year. The transfer takes place through the Navy’s International Programs Office department of foreign military sales. Pakistan will add a new ship to its growing fleet next year. Well, not exactly new: The 30-year-old frigate USS McInerney, put on the Navy’s inactivation list last month, will fly the flag of Pakistan after retirement from the U.S. Navy next year.

The transfer of old Navy ships to other countries is done through the Navy’s International Programs Office, which brokers deals through its foreign military sales department.

“I interact with global customers who want to buy Navy stuff,” said Rear Adm. Steve Voetsch, director of the IPO. “If you look at the world economy, you’d think all the money would be gone ... The demand for U.S. stuff seems to be growing internationally. They know we make good stuff and back our stuff.”

That demand, in many cases, is backed by U.S. dollars.

Poorer countries such as Pakistan can be granted U.S. ships no longer in commission. Any needed repairs or alterations are paid for with foreign military aid provided by the U.S. But there is a catch: Recipients of the aid money must “buy American.”

The Navy’s foreign military sales department brokers contracts with U.S. companies for any work done on the ship prior to transfer.

The program can be seen as a variation on checkbook diplomacy that puts money into the pockets of U.S. military contractors and bolsters the fleets of smaller allied countries willing to help with the U.S. global mission.

It’s a strategy that works toward realizing Adm. Mike Mullen’s “thousand-ship navy” between the U.S. and its allies, Voetsch said.

Mullen, now chairman of the Joint Chiefs, coined the phrase a few years ago when he was serving as chief of naval operations. The idea is that governments and international organizations could create an ad-hoc 1,000-ship global fleet, all dedicated to achieving mutual goals such as maintaining secure shipping lanes throughout the world.

Once transferred to Pakistan, the ship will join Combined Task Force 151, the multinational force aimed at fighting piracy in the troubled waters of the Gulf of Aden, Arabian Sea and Indian Ocean, Voetsch says.

The cost for refurbishments onboard the McInerney, which includes anti-submarine missile defenses and other weapons systems, is set at $65 million, according to several national and international media reports.

This is no “cash for clunkers” program. The ships are in usable condition.

“We give it away while it’s still floating,” Voetsch said. “It’s what we call a ‘hot’ transfer.”

Hot transfers are more cost-efficient because they occur right after a ship decommissions. Cold transfers take place long after a ship has been docked at a storage facility for any length of time.

Ship transfers involve policy decisions made by the State Department, Congress, the Navy and the Department of Defense.

Not all old Navy assets are up for grabs. Submarines, for example, are not eligible for transfer to foreign navies.

Over the past 10 years, the Navy has transferred 23 ships, including minesweepers, patrol craft and tugboats to other countries, including Greece, Turkey and Egypt and India

[arun]

Excerpt from an article in DNA on EUMA by former Foreign Secretary Kanwal Sibal:

Monday, August 17, 2009 9:18:00 PM

Strategic blunder?

Kanwal Sibal / DNA

…………….. While the US can offer some very advanced defence material, its military sales and transfers are accompanied by end use monitoring requirements that in many ways infringe upon the sovereignty of the recipient country.

Why should the US want to periodically inspect the equipment it has sold for good money to countries that are not its allies or for whose defence it is not responsible?

As an independent country we can legitimately question EUMA’s constraints. Other countries selling arms to us have no such inspection requirements. The end user certificate of India’s sovereign and responsible government against unauthorised transfers of equipment and technologies to third parties and for protection of IPRs suffices.

In the case of Trenton purchased from the US recently there is a bar on deploying it for offensive purposes. What would be the consequence if tomorrow we use US supplied equipment to launch limited strikes in response to a major terrorist attack from Pakistani soil?

Could the US object to this as an escalation and not an exercise in legitimate self-defence? Prudence requires attention to such issues even as we explore possibilities of expanding defence ties with the US.

We claim success in having persuaded the Americans to inspect at a time and place of our choosing and ensuring that future amendments to their EUMA legislation will become applicable only after mutual consultations.

This is not good enough, as it limits the problem in some respects but does not resolve the basic issue. About future amendments it is doubtful we will be able to resist US pressure as the continuity of the relationship could be disrupted, and modernisation, updating and even servicing of the existing equipment could become problematic.

On the eve of Clinton’s visit, a State department official said that the US was working with India on EUMA, which was part of the fulfilment of the important initiative that India and the US had signed in the area of nuclear cooperation.

After the visit, the State Department spokesman Robert Wood called EUMA a landmark event, which was important for US’s global non-proliferation efforts. Through this agreement India had been brought into the nuclear non-proliferation stream, he said. EUMA’s linkage with non-proliferation and nuclear cooperation needs an explanation.

DNA

[Sanku]

Need reassurance on nuclear deterrence: ex-Army chief

Karan Thapar: the govt has called the American ambassador on Saturday and filed a formal protest, but is that a sufficient response, surely this isn't a diplomatic issue but a strategic planning and response which I take you are more interested in?

General V P Malik: One aspect is strategic response and the other is diplomatic as it effects indo-us relations, particularly of the kind of weapons system we are going to but from them. If they are going to find their way to Pakistan obviously we have to be worried.

[Sanku]

X-post

US refuses to take ISRO and DRDO off Black list: Strategic relationship under strain

...
Another sticking point is that despite several reminders US has refused to alter its entities list, or the black list that bans trade in sensitive technology for some Indian companies, including a dozen key government companies like Indian Space Research Organisation and Defence. This is despite the fact that the matter has been raised several times with the US as India is in dubious company of countries like North Korea, Pakistan and China that have a past track record of proliferation.

Then why India, is it a pressure tactic because all it is required is for the US President to issue an order to the US Department of Commerce which can remove these companies off the list. While the Prime Minister may be feeling good about getting to dine with Obama at his first state dinner, for the moment the strategic dimension of the relationship is on the backburner and for now it has become a relationship under tremendous strain.
...