Passage of the Civil Liability for Nuclear Damage Bill will be a key test of Singh's ability to advance his agenda, which has wobbled since winning elections last May. The bill aims to restrict compensation in the event of an accident and will allow U.S. companies, including General Electric Co., to bid for contracts.
– Edited by April Murelio –
According to a Bloomberg report, Indian Prime Minister Manmohan Singh faces an opposition propped up by support for a recent nationwide strike when parliament meets, promising a rough ride for legislation such as a bill to enable the entry of U.S. nuclear power companies.
Passage of the Civil Liability for Nuclear Damage Bill will be a critical test of Singh's ability to advance his agenda, which has wobbled since winning elections in May. The legislation aims to restrict compensation in the event of an accident and will allow U.S. companies, including General Electric Co., to bid for contracts.
Approval of the bill will help nuclear technology suppliers including Westinghouse Electric Co. and GE Hitachi Nuclear Energy, controlled by Tokyo-based Hitachi Ltd. and Fairfield, Connecticut-headquartered GE, compete for $175 billion of expected contracts.
European nuclear equipment companies, including Paris-based Areva SA and Russia's Rosatom Corp., are covered by sovereign immunity because they are fully or partially controlled by governments. All atomic energy facilities in India are run by the government-owned Nuclear Power Corp.
Deadlock over the bill could add to headwinds that have already delayed bills to provide food security for the poor, reserve more seats for women in the legislature, and open the insurance and retail sectors to greater overseas investment.
“Opponents may create a situation where it will be a test of the government's resolve to move ahead” with the legislation, said Mahesh Rangarajan, an independent political analyst In India. Singh, whose ruling position is seven seats short of majority in the lower house, will have to win over smaller regional parties from outside his coalition.
The nuclear liability bill, which seeks to make nuclear reactor operators solely responsible and to cap damages, is being scrutinized by some lawmakers and is likely to be reintroduced in parliament this session. The bill triggered a controversey when it was first presented to lawmakers in May, with the opposition arguing it will shield American technology suppliers from compensation claims.
Scrutiny of the bill was bolstered last month by outrage over two-year jail terms awarded to former senior employees of a local unit of Union Carbide Corp. for their role the 1984 Bhopal gas tragedy. The sentencing raised anger over compensation and punishment in the case.
Midland, Michigan-based Dow Chemical Co., the world's second-largest chemical maker, bought Union Carbide in 1999. Dow says all liabilities were settled in a $470 million out of court settlement Union Carbide agreed with the Indian government in 1989.
“If the concerns of the people are not addressed or accommodated in the nuclear liability bill, then there will be problem,” said S.S. Ahluwalia, a BJP member of the parliamentary panel looking at the liability bill.