Nuclear Liability Law Concerns
Nirmala Sitharaman’s budget proposal to amend the liability law may please the U.S. but risks undermining nuclear safety by limiting supplier responsibility.
The 2010 law caps operator liability at ₹1,500 crore, far less than the actual costs of nuclear disasters like Fukushima (₹20 lakh crore to ₹46 lakh crore).
The law’s limitation of supplier liability raises concerns about fair compensation for victims in case of an accident.
Economic and Safety Risks
U.S. reactors, such as the AP1000, are excessively costly, with projects in the U.S. like Georgia’s reactors costing $36.8 billion, making them economically unfeasible for India.
These high costs result in expensive electricity that would be much higher than alternative energy sources in India.
Nuclear accidents show the actual costs can vastly exceed liability caps, making supplier indemnity problematic.
Supplier Responsibility and Indemnity
The 2010 law includes a “right of recourse,” allowing operators to seek compensation from suppliers for accidents caused by defects, a feature missing in many countries.
The Fukushima disaster showed that design flaws contributed to the accident, but suppliers like General Electric weren’t liable due to indemnity laws.
Indemnity removes the financial incentive for suppliers to prioritize reactor safety, as evidenced in past accidents like 1979 accident at Three Mile Island, U.S.
Pressure from the U.S. and Economic Implications
U.S. nuclear suppliers, after Obama’s 2015 visit, lobbied to amend India’s liability laws to ensure full indemnity, fearing financial risks in India.
Despite the U.S.-India Civil Nuclear Agreement, no U.S. reactors have been sold in India, as suppliers push for liability law changes.
The cost-effectiveness of U.S. reactors is questionable, with $9 billion wasted on abandoned projects in South Carolina due to delays and cost overruns.
U.S. small modular reactors are even less economical, further questioning their suitability
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