US nuclear firms try to break liability logjam with India
By Krittivas Mukherjee, Fri Jan 16, 2009 1:47pm IST
NEW DELHI, Jan 16 (Reuters) - Top U.S. firms have lobbied hard in India this week for a share in the country's lucrative nuclear market, but there was little progress on key policy issues such as accident liability protection for suppliers.
The visit by a 60-member delegation has been the biggest push yet by U.S. companies such as General Electric (GE.N: Quote, Profile, Research) to enter the multi-billion dollar Indian market opened to global trade after New Delhi signed a deal with the United States last year.
U.S. reactor manufacturers and services suppliers have been jubilant over the deal, but they still lag in a competitive scramble with Russian and European firms whose governments guarantee their liability in case of an industrial accident.
"Definitely the issue of liability is an extremely important one, and the French and Russians have an advantage here," Robinder Sachdev, President of Imagindia Institute, an Indian lobby group, told Reuters.
Indian officials said U.S. firms were being tested on several accounts, including their ability to build reactors because U.S. firms have not built one in the past three decades and the issue of liability.
U.S. executives met with Indian atomic energy officials in New Delhi, officials from the state-owned Nuclear Power Corporation of India Ltd and private Indian firms for possible partnerships.
Ted Jones, director of the U.S.-India Business Council and part of the delegation, said they had identified areas of priority for the U.S. companies wanting to do business in India.
"We have identified issues which will affect U.S. and Indian private compaines alike and which require attention from policy makers," he told Reuters.
"Those issues include civil liability and protection of intellectual properties."
U.S. firms were also trying to identify companies for tie ups.
India, whose nuclear market is valued at about $150 billion over the next few decades, has seen a rush of global companies since the U.S. deal was signed, ending 30 years of global nuclear isolation for New Delhi.
LIABILITY CONCERN
India sees nuclear energy as indispensible to fight electricity shortages and to power its economy. It, however, still needs to complete a safeguards agreement procesds with the International Atomic Energy Agency, the global atomic watchdog, to start nuclear commerce.
But U.S. firms are keen that India immediately sign a global convention on liability and compensation that limits the onus on private nuclear operators and suppliers in the event of an industrial accident.
Experts say India's divergent politics could mean opposition to any plan to dilute the responsibility of private companies involved in nuclear trade.
The issue is sensitive in India where a gas leak in a Union Carbide factory killed about 8,000 people in 1984, one of the world's worst industrial disasters. Victims of that accident say many still have not been compensated.
"We are looking at a level-playing field," Jones said, referring to the advantage Russian and French companies enjoy on the liability issue.
"If not, that will eliminate most of the best technology coming to India."
Already, state-owned firms such as Bharat Heavy Electricals Limited (BHEL.BO: Quote, Profile, Research) and NPCIL are in talks with companies from France's Areva (CEPFi.PA: Quote, Profile, Research) and Russia's Atomstroyexport for technology partners.
Last year, India and Russia signed agreements to develop new nuclear plants in India as the countries sought to deepen ties beyond their historic defence and weapon sales relationship.
Reports said Areva is also in talks to supply 1,600-megawatt reactors and a site had been identified in the western state of Maharashtra. (Editing by Alistair Scrutton)
