India Nuclear News And Discussion

[amit]

Amit;

I dont care of what is written by the experts since
1) it is now moot,
2) Your and my interpretation of the same sentence throws up startlingly two different meanings
3) Their statements are forward looking statements, and as far as forward looking statements go I have learned to trust my own judgment based on the % of correct turnouts.

However, I will take a very interesting statement from the list (one which tickled me pink)

This is what Sudhinder Thakur, executive director at Nuclear Power Corporation of India has to say:

''If you supply $US2 million of equipment, how can you be held liable for up to $US300 million over 80-odd years? It's not practical.''

So based on the undoubtedly stellar logic of this "expert" --

1) Toyota in case of a break failure on one of its cars, should pay no more than the price of the car (depreciated) in case break failure leads to death?
2) A car repairer who does a faulty break, should be liable for no more than the price of service of break repair?
3) A nuclear operator, who supplies electricity, should return the money taken in terms of electricity rentals paid after the accident?

I am duly impressed.

I can go on about the other statements too, but for once, the right thing has happened and I am in the mood for savoring this and thanking god for small mercies.

So your saying the executive director of the Nuclear Power Corporation of India doesn't know what he's talking about?

Since you say your judgment carries more weight (for yourself) than that an official of the NPC, what can I say to that, except applaud (which I'm doing)? I'm assuming you are making your comment(s) after going through the bill.

Also I'm sure you'll forgive me if I happen to trust the NPC official's (and that of PKI) opinion/views a tad more than yours.

But I'm curious how your Toyota example compares with a nuclear plant. Correct me if I'm wrong but I though (perhaps naively) that car parts and nuclear generation equipment are slightly different things. But if you want to stretch it the comparison is wrong because Toyota would not be the company which made the brakes (Toyota buys brakes from ancillaries, doesn't make them inhouse). Toyota in your comparison would be plant operator and the brake manufacturer would be the nuclear plant ancillary equipment supplier.

I don't think in case of an accident the brake manufacturer would have to pay compensation. Also as far as I know there's no comparable liability bill for the motor ancillary industry.

Apples vs Oranges comparisons is a good way to derail a discussion.

[Sanku]

Pratuysh ji;

Dont mind but you are technically incorrect on one count

The bill may not change the response but it will place a minimum quantum of compensation to be paid in case of an accident.

The bill has NO MINIMUM compensation, but a maximum one. That's why it is Supplier friendly, since they now know the maximum they could be liable for.

Now to other point, barrier for Supplier entry and insurance -- the case you cite, of workman's insurance is a GOOD method, and I hope we have something similar. But as it stands there is no such mechanism already formulated for the nuclear sector. I suspect this will continue to be the case since no one will want to a priori give the supplier a clean chit of a fixed amount. So till we know what exact mechanism exists for GoI insisting that supplier show ability to pay this discussion is moot, because as far as we know, according to this bill, there is no mechanism and hence no compulsion on the supplier to a priori show a certain minimum insurance.

However EVEN if suppliers have to seek insurance, as you said they can approach as consortium

Further, I am sure the supplier seeks insurance, the insurance terms and conditions would be different. A foot mat supplier may get LIC to insure him for a very low premium since the foot mats dont jeopardize safety. (In fact I am sure some suppliers will try and pull a fast on some PSU insurer to provide a large cover with low premium.)

So even if a supplier needs insurance (we dont know the mechanism yet, but assuming it did) the following are to be expected
1) Different minimum insurance backing which would need to be shown for different kind of suppliers (for example PSUs may not need ANY)
2) Insurance premiums will NOT (added later) be "blanket" same for all companies and components.

So the angst about insurance premiums is I think a little misplaced. PKI sir is absolutely right to worry about that specifically in context of Indian industry (since his overall theme is how things are being given away and each step is for that) and those items can be addressed by a public-private consortium or a dedicated Nuclear insurer for India etc etc...

These are issues to be worked out, but the first step was at least making sure that suppliers and not given a free passage a la Bhopal

[Sanku]

[

So your saying the executive director of the Nuclear Power Corporation of India doesn't know what he's talking about?

Did I say that Amit? As far as I see I didn't, and as I see you are back to your old habits of speaking for me.

I said what I said, no more no less.

As I said, your "understanding" of fairly obvious things tends to be colorful including your detailed paraphrasing of my response, I will satisfy myself with simply saying that I have no intrest and intention to correct you.

Just that I could resisting on that gem of a statement ...Cheers.

[Pratyush]

Sanku ji, Pure speculation on my part.

What may happen is that the NPC may ask for the Liability insurance premium to be quoted as a part of the cost of subiited tender and itself.

So when it opens the tender it will know which supplier is able to meet the cost of liability and award the tender accordingly.

But this is pure speculation on my part. I need to know where the draft is available as a search in google did not enlighten me.

[Sanku]

But this is pure speculation on my part. I need to know where the draft is available as a search in google did not enlighten me.

Yes I cant find it online either.

[shukla]

....and its a done deal....

Parliament adopts Nuclear Liability Bill

Paving the way for India to have nuclear commerce with the world, parliament on Monday adopted a nuclear liability bill with the government insisting that the compensation package for victims matches that of the US and it was still open to accommodate some suggestions.

With BJP on board after its suggestions were accepted, the Civil Liability for the Nuclear Damages Bill, 2010 was adopted by the Rajya Sabha by a voice vote after it rejected certain amendments moved by the Left parties. The bill, which is crucial for operationalisation of India's civil nuclear deals with the US and other countries, was passed by the Lok Sabha on August 25.

Winding up a debate on the proposed legislation, Minister of State in the PMO Prithviraj Chavan said, "This is not a finality... We will take care of every single suggestion. If required, the bill will be changed for better." Responding to a number of proposals made by the members during the five-hour debate during which Prime Minister Manmohan Singh was present, Chavan said, "When we frame rules and regulations, we will keep the suggestions in mind."

He said the bill provides for prompt "no-fault" compensation to victims in the event of a nuclear accident without bypassing the existing criminal laws. On questions over the quantum of compensation of Rs 1500 crore on the part of the operator, the minister said the amount, along with the 300 million dollar Special Drawing Rights ( SDR), is exactly the same which is provided in the US. He said besides Rs 1500 crore and 300 million SDRs, the bill provides for setting up a compensation fund.

[Gerard]

what would happen if an accident happens in a N-power plant built with Russian equipment, supplied by Russian equipment makers?

In accordance with the India-Russia agreement, the Indian operator has full liability for any damages whether inside or outside Indian territory.

[arnab]

There are courts to stop a faulty award, and secondly they can in any case like UCC sell themselves off and disapper. In any case that is what they will probably do after dragging the matter through court.

But at least their run away act would happen at less than 100 miles per hour with GoI not facilitating their getaway -- the case which was attempted to be legislated.

Probably Congress wanted to legislate what their Govt in Center and Madhya Pradesh did with UCC in a ad hoc manner and give it legal blanket so if and when they pulled a similar stunt they could just point at the law and smile, "hey look its formal"

Alas they will still have to do things the way they did for Bhopal.

but, but if anyone can approach courts under the fundamental right to constitutional remedies - why have explicit legislation on supplier liability? Can't courts stop a 'faulty award' imposed on the operator?
Your using of the UCC example is interesting - Not sure if you realise that UCC was the operator of the Bhopal plant. What this kind of bill does is allow UCC the right to go after faulty suppliers who helped build the plant. IOW muddy the issue even further. I think the opposition needs smarter people in their ranks.

[amit]

what would happen if an accident happens in a N-power plant built with Russian equipment, supplied by Russian equipment makers?

In accordance with the India-Russia agreement, the Indian operator has full liability for any damages whether inside or outside Indian territory.

Thanks for pointing that our Gerard. It was given the an overwhelming number of our future nuclear power plants would be of Russian origin. Now after this bill this will be more so unless the government gives/makes some dramatic concessions.

And where does all this ballyhoo of equipment suppliers being made to pay and being even going bust in the finest traditions of Principles of Justice go? What happens, in terms of compensation, for the victims of a (god forbid) nuclear accident in a Russian supplied plant?

It really amazes me how this elephant in the room is studiously ignored on this thread.

[amit]

but, but if anyone can approach courts under the fundamental right to constitutional remedies - why have explicit legislation on supplier liability? Can't courts stop a 'faulty award' imposed on the operator?
Your using of the UCC example is interesting - Not sure if you realise that UCC was the operator of the Bhopal plant. What this kind of bill does is allow UCC the right to go after faulty suppliers who helped build the plant. IOW muddy the issue even further. I think the opposition needs smarter people in their ranks.

This is a recurrent problem.

If you read the past few pages of this thread a lot of folks are mixing up "operator" with "equipment suppliers" when bringing up the Bhopal tragedy as an example. No one is questioning why the company that supplied the pipe and valves through which water leaked into the tank containing methyl isocyanate at the UCC plant (that triggered the gas leak) was never hauled to court for compensation.

[vera_k]

Well, the liability is a convenient red herring. The goal is to slow down or scupper nuclear power generation from unreliable (read Western) suppliers until the thermonukes are tested or the concerns are addressed somehow.

[negi]

Amit the gas leak was not caused by 'defective material or material failure' per se but due to the sheer negligence of the operator (UC) as the plant was operating at a LOSS , the factory safety systems and procedures were severely compromised. The introduction of water into the MIC tank was a result of a major goof up in carrying out maintenance procedures.

[amit]

Amit the gas leak was not caused by 'defective material or material failure' per se but due to the sheer negligence of the operator (UC) as the plant was operating at a LOSS , the factory safety systems and procedures were severely compromised. The introduction of water into the MIC tank was a result of a major goof up in carrying out maintenance procedures.

Negi,

I agree with you and that's what the investigations showed. Even UCC had claimed "sabotage" by a disgruntled worker.

However, the distinction you make is precisely the point I'm stressing on. The Bhopal case is different from what the liability bill proposes to cover. Hence when making comparisons with Bhopal one needs to keep this distinction in mind.

[arnab]

Amit the gas leak was not caused by 'defective material or material failure' per se but due to the sheer negligence of the operator (UC) as the plant was operating at a LOSS , the factory safety systems and procedures were severely compromised. The introduction of water into the MIC tank was a result of a major goof up in carrying out maintenance procedures.

Negi - that is always the case. Now you have introduced a supplier liability over a 20 year period. How in hell are you going to disentangle how much of the disaster was due to the fault of the operator and how much of it was due to the supplier supplying bad products ? Which is why - the civil liability should fall on the operator irrespective of fault (as is the norm). Otherwise you are guaranteeing long drawn out court cases with no outcomes.

My own CT is that this move was nudged by other players in the energy sector - particularly those heavily invested in the UMPP (read Reliance power) to make the domestic nuke industry uncompetitive What better way to do it than wrap yourself around a flag?

[amit]

Well, the liability is a convenient red herring. The goal is to slow down or scupper nuclear power generation from unreliable (read Western) suppliers until the thermonukes are tested or the concerns are addressed somehow.

Would you care to elaborate on this point? AFAIK any nuclear power plant contract we sign would come with fuel guarantees because the fuel would be under IAEA inspection.

[amit]

My own CT is that this move was nudged by other players in the energy sector - particularly those heavily invested in the UMPP (read Reliance power) to make the domestic nuke industry uncompetitive What better way to do it than wrap yourself around a flag?

Arnab,

There's another player which gains handsomely. The Russian Nook industry. They don't have to bother about insurance premiums and what was already cheap becomes (relative to Western suppliers, that is) even more cheaper. (That itself may not necessarily be bad but one of the objectives of the deal was to get hands on different types of technologies so that local industry could learn. I think there's already sufficient indigenous knowledge about Russian technology).

Time to have some vodka.

[negi]

Amit it is you who were trying to use Bhopal gas tragedy to make a point about supplier vs operator liability, I merely pointed out that it was OPERATOR that was at fault in that case (there was not material failure hence no question of supplier liability) and more importantly UC had a controlling take in the plant.

We spend about 500 crores on chootiayapa like remembering Rajiv Gandhi and celebrating clown brince's birthday so whats the big deal if there is an extra 1000 crores liability on nuclear reactors ? GoI's superior drafting skills always translate into crores of cost overruns in every foreign deal so all this bean counting over liability sounds futile to me, the drama has only begun the environmentalists and NGOs are yet to play their important part .My take on this is increasing the cap from 500 to 1500 crore to pass the bill NOW makes a lot of sense instead of waiting for monkeys in fish market to arrive at a consensus on original bill.

[arnab]

There's another player which gains handsomely. The Russian Nook industry. ).

But even Russia is saying nyet

Russia says no to supplier liability

http://www.business-standard.com/india/ ... ty/405596/

[negi]

The 'right to recourse' again in my opinion is a non issue for come to think of it who will file for it ? The operator i.e. NPCIL aka GoI ? Also the clause 17 (a) requires that 'right to recourse' should be provided for in contract in writing(GoI and the supplier know better how to address it , atleast the latter does), lastly and more importantly what makes people think that GoI will wait for the court to announce its verdict before disbursing the medical/monetary aid to the affected people ?

Things might obviously need to be re-visited if private players are invited to operate the reactors in future which I think as with other GoI ventures would be on the lines of a JV with NPCIL to start with.

[arnab]

The 'right to recourse' again in my opinion is a non issue for come to think of it who will file for it ? The operator i.e. NPCIL aka GoI ? Also the clause 17 (a) requires that 'right to recourse' should be provided for in contract in writing(GoI and the supplier know better how to address it , atleast the latter does), lastly and more importantly what makes people think that GoI will wait for the court to announce its verdict before disbursing the medical/monetary aid to the affected people ?

Things might obviously need to be re-visited if private players are invited to operate the reactors in future which I think as with other GoI ventures would be on the lines of a JV with NPCIL to start with.

arrey baba that is what we have been saying - GOI (which is also the operator) is the insurer of the last resort. So they will pay (or loot) compensation to the affected parties irrespective of who the court decides to be guilty at whatever date (If Bhopal is any indicator, it will be 20 years or more). But the suppliers will take cognizance of the fact that they may be held liable for any piece of equipment they supplied for over a 20 year period. This will require them to buy insurance and future legal costs and they will capitalise all these costs to the cost of the equipment. This will in turn make nuke power costlier and at the margin uncompetitive with coal / gas based power plants.
So all this song and dance about saving India from imperialistice suppliers could have been avoided if folks realised that this impacts domestic nuke suppliers as well.

[amit]

Amit it is you who were trying to use Bhopal gas tragedy to make a point about supplier vs operator liability, I merely pointed out that it was OPERATOR that was at fault in that case (there was not material failure hence no question of supplier liability) and more importantly UC had a controlling take in the plant.

We spend about 500 crores on chootiayapa like remembering Rajiv Gandhi and celebrating clown brince's birthday so whats the big deal if there is an extra 1000 crores liability on nuclear reactors ? GoI's superior drafting skills always translate into crores of cost overruns in every foreign deal so all this bean counting over liability sounds futile to me, the drama has only begun the environmentalists and NGOs are yet to play their important part .My take on this is increasing the cap from 500 to 1500 crore to pass the bill NOW makes a lot of sense instead of waiting for monkeys in fish market to arrive at a consensus on original bill.

Negi,

I suggest you read the past few pages of this thread to see where and how the Bhopal comparison came up as an example for equipment supplier liability.

As regards the uppping of liability we'll have to wait and see how the dice roll once talks on the actual deals start. But it does up the cost for small Indian companies which supply a number of vital equipment to the nuclear sector. Again see some of the reports cited previously.

[Sanku]

but, but if anyone can approach courts under the fundamental right to constitutional remedies - why have explicit legislation on supplier liability? Can't courts stop a 'faulty award' imposed on the operator?

I dont understand what you are saying here?

Yes courts CAN stop a faulty award on a operator or supplier NOW that the anti-constitutional clause in the previous bill keeping courts OUT of the sector is removed.

So?

Your using of the UCC example is interesting - Not sure if you realise that UCC was the operator of the Bhopal plant. What this kind of bill does is allow UCC the right to go after faulty suppliers who helped build the plant. IOW muddy the issue even further. I think the opposition needs smarter people in their ranks.

As Negi pointed out, this is a meaningless comparison for one the operator here is already GoI, and the private issue is shelved. We already have faith that GoI will do (or will not do) what it needs and wants to irrespective of a bill.

This bill is the window dressing for international commerce -- read commerce with US -- Indian nuclear plants and Russian supplied plants etc etc were all working in India anyway without the need for the bill or liabilities discussion since it was all Govt to Govt deals (for better or for worse they all ended up with GoI and that is a different discussion)

[Sanku]

This will require them to buy insurance and future legal costs and they will capitalise all these costs to the cost of the equipment. This will in turn make nuke power costlier and at the margin uncompetitive with coal / gas based power plants.

Tough luck, needing a environment where you are a priori guaranteed freedom to supply substandard goods without a problem means you ARE uncompetitive.

The rona and dhona on "dont ask us to be responsible if you want cheap power" probably means that lot of details need to be swept under carpet to make this happen -- bad idea.

[arnab]

This bill is the window dressing for international commerce -- read commerce with US -- Indian nuclear plants and Russian supplied plants etc etc were all working in India anyway without the need for the bill or liabilities discussion since it was all Govt to Govt deals (for better or for worse they all ended up with GoI and that is a different discussion)

You brought in the UCC example. Yes previously they were all govt to govt deals. But now the game has changed. Earlier all liabilities were to be borne by GOI (as the operator). Now suppliers (Russia, US, domestic) would be held liable for their products. How is this a window dressing only for US?

[Sanku]

Is this of any help?
(Draft?) Civil Liability for Nuclear Damage Bill 2010
Amendment

For Amendments and previous notes etc., please check the folder.

Thanks a ton.

[arnab]

Tough luck, needing a environment where you are a priori guaranteed freedom to supply substandard goods without a problem means you ARE uncompetitive.

The rona and dhona on "dont ask us to be responsible if you want cheap power" probably means that lot of details need to be swept under carpet to make this happen -- bad idea.

Since no country in the world has supplier liability - would you substantiate your case that a lack of supplier liability would lead to substandard product?

[Sanku]

Tough luck, needing a environment where you are a priori guaranteed freedom to supply substandard goods without a problem means you ARE uncompetitive.

The rona and dhona on "dont ask us to be responsible if you want cheap power" probably means that lot of details need to be swept under carpet to make this happen -- bad idea.

Since no country in the world has supplier liability - would you substantiate your case that a lack of supplier liability would lead to substandard product?

Did I say "lack of supplier liability would lead to substandard product"?

Why not discuss what words are written than rather than what you think has been written?

[arnab]

Did I say "lack of supplier liability would lead to substandard product"?

Why not discuss what words are written than rather than what you think has been written?

OK, since every other country in the world provides an 'environment where you are a priori guaranteed freedom to supply substandard goods without a problem', does that mean that the industry is uncompetitive or that they supply substandard goods?

[negi]

Arnab the 'right to recourse' is a part of the original bill (I had posted the link to original GoI copy on page 34 of this thread) so that remains unchanged so I don't see the reason to discuss all this again the thing which changed is the liability amount and as far as I am concerned I see it as a price to get it passed in this session of the parliament, nothing more nothing less.

I was in favor of the bill in its earlier form and have no issues with it in its current form. The Price Anderson bill and other stuff discussed now has been visited before and you were there.

[Neshant]

^^ in the US, it means they get shaken down for 20 billion with or without liability.

only Indians are engaging in this foolishness of limiting our liability.

the liability issue should have infinite liability depending on the disaster that has been caused.

also has anyone thought about indexing the liability to INFLATION. within 10 years, the amount specified in the liability will be pocket change.

[Rudradev]

The point here isn't "supplier liability", it is explicit supplier immunity which Manmohan Singh was trying to wriggle into the Nuclear Liability Bill until the very last minute, clearly on behalf of American suppliers whose profits are far more impotant to him than the welfare of the Indian people. No other country goes out of it's way to immunize suppliers from being liable for compensatory damages in an instance of faulty material and equipment supplied by them leading to a nuclear disaster.

[arnab]

Arnab the 'right to recourse' is a part of the original bill (I had posted the link to original GoI copy on page 34 of this thread) so that remains unchanged so I don't see the reason to discuss all this again the thing which changed is the liability amount and as far as I am concerned I see it as a price to get it passed in this session of the parliament, nothing more nothing less.

I was in favor of the bill in its earlier form and have no issues with it in its current form. The Price Anderson bill and other stuff discussed now has been visited before and you were there.

To be completely frank, I do not have too many issues either - but why let it get in the way of a discussion? I believe that GOI (and suppliers) should create an escrow account for nuke disasters using some formulation ( e.g. proportional liability based on the nature of goods supplied ?) and that should be used for immidiate relief, with GOI being the insurer of last resort. All this 20 year supplier liability is not very useful IMHO.

[Sanku]

OK, since every other country in the world provides an 'environment where you are a priori guaranteed freedom to supply substandard goods without a problem', does that mean that the industry is uncompetitive or that they supply substandard goods?

Would you please substantiate your claim about every other country in the world having "priori guaranteed freedom to supply substandard goods without a problem"; heck forget the world, can you please just do it for the following three countries

France
US of A
Japan

Also in case of each of the countries please feel free to make a comparison of why their systems are exactly the same as Indian ones with State owned and operated nuclear power generation etc etc...

In case you think that the above three examples are not suitably representative of the "world" and overwhelming use of nuclear power generation in other countries exists causing the above to pale in insignificance, I will well come data points on the "countries of all the world" that you would like us to emulate. I am particularly interested in the Nuclear use pattern and laws in Papua New Guinea, which as a important member of the brotherhood of nations that consist of "all the world" whose example provides the inexorable logic of what we should do is based on.

[Sanku]

To be completely frank, I do not have too many issues either - but why let it get in the way of a discussion? I believe that GOI (and suppliers) should create an escrow account for nuke disasters using some formulation ( e.g. proportional liability based on the nature of goods supplied ?) and that should be used for immidiate relief, with GOI being the insurer of last resort. All this 20 year supplier liability is not very useful IMHO.

I did not write the above honest, although it sounds like something I would have written.

[Pratyush]

Sanku / Arnab,

Are you sure yoy guys are not suffring from Hyperactivity disorder. Beating a hasty retreate.

[arnab]

Would you please substantiate your claim about every other country in the world having "priori guaranteed freedom to supply substandard goods without a problem"; heck forget the world, can you please just do it for the following three countries

France
US of A
Japan

Also in case of each of the countries please feel free to make a comparison of why their systems are exactly the same as Indian ones with State owned and operated nuclear power generation etc etc...

Umm show me if those countries have any supplier specific liability? If not, then obviously they have an 'environment' to supply substandard goods. And apparently the GOI's bill is explicitly intended to disable such an environment? So unless you are arguing that all the suppliers in the world and domestic ones reserve their substandard products for India (hence India needs to make a special case), I'm not sure what the supplier liability would achieve except raise costs for domestic industry and domestic operators.

[Sanku]

Sanku / Arnab,

Are you sure yoy guys are not suffring from Hyperactivity disorder. Beating a hasty retreate.

This is hyperactivity? You have not been around when some of the real hot issues were discussed

[Sanku]

Umm show me if those countries have any supplier specific liability?

I dont know, and dont particularly care, as far as I think the Indian situation is unique and the bill is to address the concerns of Indians in our context and I will restrict myself to that.

But since YOU asked us to consider "all the world" I was hoping you will educate us why we should do so and just exactly what all the "world" does.


And oh yes, do remember to include Papua New Guinea as well, I have always been fascinated by that part of the world.

[Pratyush]

It is, at Least from where I am standing. One page in one day. What is this the TSP thread ?

Any way will be able to see the link posted in the previous page at home. The office firewall is preventing access. Only then I will be able to take our discussion forward.

Added later, very true regarding supplier liabilities.

[arnab]

I dont know, and dont particularly care, as far as I think the Indian situation is unique and the bill is to address the concerns of Indians in our context and I will restrict myself to that.

Why is the Indian situation unique? don't the laws of statistics and rewards vs risk probabilities apply to India?