The United States expects India to clear a raft of legislation including passing the draft Nuclear Liability Bill and amending the Atomic Power Act of 1962 before the visit of Secretary of State Hilary Clinton next month. The administration also hopes India will announce the location of the two nuclear parks where American companies will set up two reactors, before the Clinton visit.
The two sites — in Jaitapur (Maharashtra) and Koodankulam (Tamil Nadu) — have already been identified for French reactors, being set up by French nuclear power major Areva, and in collaboration with Russia, respectively.
However, the decision on site reactors being put up by other countries is still pending clearance, principally because the state governments have to give their consent. Andhra Pradesh, for instance, was favoured as a location but the state government has said it is not interested in having a nuclear reactor. West Bengal, by contrast, has been pressing for one since the 1970s.
On Thursday, the US’s House Foreign Affairs Committee heard from Assistant Secretary of State for South and Central Asian Affairs Robert Blake, while testifying on ‘a regional overview of South Asia’ that this decision could be taken before Clinton’s visit.
“Secretary Clinton will be going out there (India) later in July, which will be a major visit for us,” Blake said, adding “we hope, at that time, that the Indians will be in a position to announce where nuclear parks — we hope to have two sites that would be announced, where American companies can go in and provide new reactors, which would be a major source of new business opportunities for American companies. And then we’re also hoping to see action on nuclear liability legislation that would reduce liability for American companies and allow them to invest in India”.
Top sources in the government had acknowledged last month that the US was getting impatient with the pace of Indian law-making and the previous US Ambassador David Mulford had met a minister in the government and even suggested that the nuclear liability law be promulgated “through an ordinance” if the Lok Sabha’s calendar did not permit pushing the legislation through.
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“The draft of the Nuclear Liability Bill is ready. What this will do is indemnify American companies so that they don’t have to go through another Union Carbide in Bhopal,” a minister said. The Union Carbide facility in Bhopal was the centre of an industrial accident and the payouts to the victims of the Bhopal gas leak tragedy coupled with litigation sent the company into liquidation, representing red flags for others wanting to invest in India. The Nuclear Liability Bill will allow regulatory checks by authorities and prevent a repeat of the Bhopal disaster.
The Indian Atomic Energy Act of 1962 needs to be amended to allow private sector investment in the civil nuclear sector. Currently, no private entities are permitted to invest in any enterprise connected with nuclear energy.
Draft legislation for both the new Bill and the amendment are ready. The question is whether these will be pushed through in the Budget session, so that they represent ‘work in progress’ when Clinton is in India.
Although the government has ruled out 100 per cent FDI in nuclear energy, to begin with, private players would have to enter India’s nuclear power generation in collaboration with centrally-regulated nuclear entities like Nuclear Power Corporation as junior partners. This could begin at 25-26 per cent and is likely to be capped at 49 per cent later. A centrally-controlled regulator would have complete oversight over safeguard measures.