Japan wants slice of nuclear pie, warms up to liability law

While Toshiba owns US-based reactor manufacturer Westinghouse, Hitachi is a partner of GE’s reactor business.

Written by Subhomoy Bhattacharjee , Anil Sasi | New Delhi | Published:June 12, 2014 2:59 am
Russia too is reported to have communicated an “in principle” nod to the Indian nuclear liability law, paving the way for signing a contract for the setting up the third and fourth units of the Kudankulam Nuclear Power Project.  Russia too is reported to have communicated an “in principle” nod to the Indian nuclear liability law, paving the way for signing a contract for the setting up the third and fourth units of the Kudankulam Nuclear Power Project.

The deadlock on the liability issue, which had stonewalled progress on the operalisation of nuclear pacts that India had signed with global reactor vendors, is on the verge of being broken.

Japan could offer Prime Minister Narendra Modi a nuclear deal in the civil sector when he travels to Tokyo next month, Hiroshi Hirabayashi, former Japanese ambassador to India and now adviser to Prime Minister Shinzo Abe, indicated.

Russia too is reported to have communicated an “in principle” nod to the Indian nuclear liability law, paving the way for signing a contract for the setting up the third and fourth units of the Kudankulam Nuclear Power Project.

“The (Indian nuclear liability) law enacted is certainly challenging. We are working with our colleagues (counterparts) in India and the issue has been resolved,” Kirill Komarov, Deputy Director General on Development and International business, Rosatom State Corporation, was quoted as saying at a press conference on June 10 in Moscow by PTI.

State-owned Nuclear Power Corporation of India (NPCIL) did not offer a comment on a specific query sent Wednesday evening on the Russian offer.

Hirabayashi, who was here in India earlier this week to discuss the issues Modi and Abe may sign on during the upcoming July visit, indicated that Japan has taken note of the specific reference in the President’s Address to the joint session of the two Houses of Parliament, wherein Pranab Mukherjee had said: “international civil nuclear agreements will be operationalised and nuclear power projects for civilian purposes will be developed”.

“We are very happy to note it”, he told The Indian Express.

Japan is a key player in the operationalisation of the commercial nuclear pacts signed by India. Japanese companies are major players in two of the four reactor vendors that have signed preliminary agreements with India for supply of equipment for imported Light Water reactor-based projects planned on coastal sites.

While Toshiba owns US-based reactor manufacturer Westinghouse, Hitachi is a partner of GE’s reactor business.The government has short-listed Toshiba-Westinghouse’s ‘AP1000’ reactors, GE-Hitachi’s ‘ESBWR’ reactors, along with French firm Areva’s EPRs and the Russian firm Atomstroyexport’s ‘VVER’ series reactors, which are already being deployed at Kudankulam.

Cooperation with Japan on setting up nuclear fuel based plants in India had been held up because of India’s refusal so far to accept limited liability for commercial operators who supply equipment.

The Civil Liability for Nuclear Damage Act, cleared in 2010, said not only the reactor operator but also equipment suppliers would face unlimited legal liability in case of a nuclear incident.

In November 2011, India announced new rules that cap the liability on suppliers, both foreign and domestic, to Rs 1,500 crore. Global nuclear vendors were, however, not satisfied by the cap and sought further changes, especially Sections 17(b) and 46 of the Act.

Formal negotiations for a civil nuclear deal with Japan started in Tokyo in June 2010 that were followed by two consecutive rounds in October and November 2010.

Negotiations were subsequently put on the backburner in the wake of the Fukushima nuclear accident in March 2011. The last round of talks was held in November 2013.

While Japanese companies such as specialist reactor vessel manufacturer JSW are keen on a nuclear deal, the government has been insistent on India agreeing to more stringent inspections than those required under nuclear cooperation pacts with other countries, based on the US-India nuclear deal.