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Nuclear deal: government in damage control mode

delhi Updated: Sep 20, 2013 15:29 IST
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The government on Thursday went into a damage control mode, ahead of Prime Minister Manmohan Singh’s US visit next week, to pacify its sole nuclear power plants operator which questioned a proposed $50-60 million contract with an American company.

The government also allayed fears about the dilution in the civil nuclear liability law, saying no relaxation will be allowed in the 2010 Act, which has stringent provisions to hold supplier companies liable for damages in case of a nuclear accident.

During Singh’s visit, due to begin on September 25, government-owned Nuclear Power Corporation of India Limited (NPCIL) is set to sign a “pre-project services agreement” with Westinghouse, which will eventually lead to this company installing six nuclear reactors in Bhavnagar district of Gujarat.

HT has learnt that the government overruled objections by the NPCIL, which was initially not in favour of an “arbitrary and unprecedented agreement”, since it did not find merit in spending so much money for an agreement which mostly involves a technical study.

The Cabinet Committee on Security (CCS) is likely to take the matter up before Singh leaves for the US, once the agreement gets the nod of the Atomic Energy Commission.

NPCIL was reluctant to go ahead with the agreement, which was “not economically viable and neither had any due diligence been done on pricing and technical expertise”.

The government, however, did not budge since it had already given assurances to the US for allowing installation of nuclear reactors by its companies on two designated sites and after having given a political commitment, there was no question of going back on it.

This had been conveyed by the then foreign secretary Shiv Shankar Menon in a letter addressed to the then under secretary of US state department in a letter in September 2008.

The US has been insisting a firm commercial assurance as well. The government took the line that the pre-project study is not a commercial contract.