Navigating Through Suppliers Liability In The Indian Nuclear Sector
India looks for major nuclear scale-up to enable its clean energy transition that calls for major collaboration and deeper interactions with international nuclear suppliers and private players. However, suppliers liability has been a contentious issue. Are there any practical ways to deal with the issue in short and long term and keep the business engagements going?
NBP's Country Head for India Vinay Khanduri spoke with Mr. Padmakumar S Nair on all such key issues. Mr. Nair is Former Head of International Cooperation & Safeguards Division at the Department of Atomic Energy (DAE) and is a key expert on the nuclear law and liability regime.
Key points discussed:
Suppliers liability is a contentious issue. DAE has been trying to clarify the doubts of suppliers and has released a comprehensive FAQ document to the same. But skepticism still prevails.
An amendment to CNLD Act is a higher-level call though it is not impossible if there is a political will.
Suppliers’ liability is absolutely limited and NOT unlimited in terms of contact value of the work to any suppliers and for the initial licensing period of say 5-7 years only.
Operator’s liability is perpetual from the time of fuel loading till defueling and decommissioning. So, the operator’s liability in a sense provides all-time backup to suppliers.
For NPCIL’s project based on PHWR technologies, NPCIL itself assumes the role of suppliers. So, there is absolutely no requirement for any suppliers- Indian or global suppliers participating in the PHWR projects, to take any suppliers policy. It is clearly mentioned as the GCCs of the NPCIL’s tender documents.
For any new business model involving private investment, NPCIL itself can take care of the operators’ and suppliers’ liability and accordingly the costing part can be channelized.
For SMRs and Microreactors, under the current setup liability will have an impact depending upon the fact whether the rated thermal power of the reactor is less or more than 10 MWth. Insurers will have to involve SMR vendors for operators’ insurance policies.
FAQ document of the DAE will require a legal status that can be done either through some government notification or Presidential order.
For global power projects in India, a single major supplier can be designated to assume the role of supplier and let go off all the other vendors, equipment or component level small suppliers.
The 5th edition of India Nuclear Business Platform (INBP) will take place in Mumbai this 19-20 November 2024. The industry meeting will feature all the officials and players across the Indian nuclear supply chain. For more information on this meeting including exhibition opportunities, click here
