For a share of the nuclear business pie

For a share of the nuclear business pie
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First Published: Tue, Jan 13 2009. 11 45 PM IST
Updated: Tue, Jan 13 2009. 11 45 PM IST
New Delhi: It is three months since the India-US nuclear deal was signed into law in the US, and intense lobbying is on for the $160 billion nuclear business pie. Both countries are holding high-level discussions and are in the process sizing each other up before deals can be negotiated and finalized. Sixty members from the US industry and government are currently in India to explore business opportunities. But they perhaps expected a smoother ride.
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Former Indian Ambassador to United States Lalit Mansingh says acceptance of US firms as suppliers would depend on how they tackle issues of ability, reliability and liability. “The common belief is that America hasn’t built a nuclear power plant in the last 30 years. Russia and France have proven ability and continue to build new reactors. Reliability is a chronic issue when we do business with the US. In Tarapur, the US broke contract, pleaded an act of Congress does not allow it to supply material, even though it has contract to do so. There have been numerous cases where supplies have been abruptly stopped and India has been left high and dry in the middle of a sensitive project. If you sign a contract, are you going to supply for a lifetime (of a reactor)?”
This is a question that has been haunting the Americans for sometime and puts them immediately on the defensive. “We have not stood still, over those 30 years since the Three-mile island incident we have improved not only our operations but also safety. I have heard the rumors and competition challenges that we have been asleep. We have been far been far from being asleep”, says Steven A Hucik, Senior VP – Global Unified ABWR Projects, GE-Hitachi Nuclear Energy. Twenty-four percent of the world’s nuclear reactors are located in the US and also have the highest nuclear power capacity they say.
On the liability issue, the US officials and companies say it is in India’s interest to accede to the International Convention to Supplementary Compensation. Eric Jones, an official with the US Embassy in New Delhi says, “It’ll get India a competitive position as a buyer internationally. It improves India’s ability to shop around for cost and effective things”. They further argue that for Russian and French companies it might not matter as they are state-owned. But Indian experts feel that US firms would be at a disadvantage on the liability issue. “Liability has been raised by Americans and has not been raised by other suppliers. Russian and French haven’t made a big issue”, says Lalit Mansingh.
The imminent change in the governments of both countries is also making business and administration establishments on both sides a little nervous. The US side is worried about whether a change in government will have an impact on the deal. In response, Congress spokesperson Abhishek Manu Singhvi says India has shown consistency on foreign policy matters more than anything else. “It is a government of India policy”, he adds. On its part, the Indian side seems more apprehensive about the change in the US administration.
Former Foreign Secretary, Kanwal Sibal adds, “What would sour the mood is if any amendment to energy guidelines.”
The nuclear agreement is in place but the commercial arrangements are yet to be worked out. Experts say it will take at least 12 months for the real action to begin. What is clear is that India is not going to put all its eggs in one basket. And the nuclear market pie would be divided between the French, the Russians and the Americans. But in all likelihood, the US will have the lion’s share.
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First Published: Tue, Jan 13 2009. 11 45 PM IST