Daily Management Review

Westinghouse Close to Striking Deal with Indian Government for Building Six Nuclear Reactors: Reuters


Westinghouse Close to Striking Deal with Indian Government for Building Six Nuclear Reactors: Reuters
Indicating that its $150 billion dollar nuclear power program is getting off the ground, India expects to seal a contract with Westinghouse Electric Co LLC to build six nuclear reactors in the first half of next year.
India plans to set up roughly 60 reactors, which would make it the world's second-biggest nuclear energy market after China. The first of the plants is to come up in Gujarat, the home state of Prime Minister Narendra Modi.
As part of a broader push to move away from fossil fuels, cut greenhouse gas emissions and avoid the dangerous effects of climate change, India wants to dramatically increase its nuclear capacity to 63,000 megawatts (MW) by 2032, from 5,780 MW at present.
The path to nuclear commerce became clear after India signed a pact with the United States in 2008. This pact has been previously been stymied due to New Delhi's nuclear weapons program and shunning of the global Non-Proliferation Treaty (NPT).
After India adopted a law in 2010 giving the state-run operator Nuclear Power Corp of India Ltd (NPCIL) the right to seek damages from suppliers in the event of an accident, all hopes that reactor makers would get billions of dollars of new business evaporated.
By setting up an insurance pool with a liability cap of 15 billion Indian rupees ($226.16 million), Indian officials have been trying to assuage suppliers' concerns.
Indian government sources said that it expects that the final hurdle - ratification of the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage (CSC), would be overcome in weeks from now.  
The CSC requires signatories to shift liability to the operator and offers access to relief funds.
Channeling the accident liability exclusively to the operator and taking measures that would ultimately help India to move towards a framework that satisfies the CSC would be taken by the Indian government, expects Westinghouse. The statement, which reiterated their expectations of the Indian government to the program, made no reference to ongoing negotiations.
Following news of the possible deal, shares of Westinghouse's parent, Toshiba Corp, jumped as much as 3.3 percent on Thursday. While noting that Westinghouse has been confident of winning orders from India, a Toshiba spokesman declined to comment on the report.
General Electric Co, whose nuclear energy venture with Hitachi was offered a site six years ago to build reactors, could also be put under pressure due to the possible deal with Westinghouse.  
While saying that India was keen for a decision from the company soon, a GE official said that the company had still not decided whether it would move ahead with the plan.
The CSC would be "a sustainable solution to concerns about India's existing domestic nuclear liability law", said GE Hitachi Nuclear Energy, adding that it had strong interest in India.
Industry officials say that the aim to lift the share of nuclear power to a quarter of its energy mix, from barely 3 percent now, is very ambitious even as they admit that India's plans for ramping up nuclear capacity have in the past fallen far short of targets.