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Wearing a silly cap

That the government feels a liability law is needed suggests it’s preparing to open the nuclear sector to private players, writes Karan Thapar.

india Updated: Mar 20, 2010 23:42 IST

The nuclear liability bill is yet another example of how the government can undermine a good cause by poor handling. The Women’s Bill, which I wrote about last week, was very similar. In this case, the bill is crippled both by what it says and what it fails to make clear. In truth, it’s incompetently drafted and foolishly presented.

First, that the government feels a liability law is needed suggests it’s preparing to open the nuclear sector to private players. For, if the nuclear field is to remain the preserve of the State why does the government need a law to bind itself? But as soon as this issue was teased out, the government announced that private sector participation isn’t envisaged. Whenever it is, a new law will be created.

In which case why is the government seeking to place a cap — suggestive or definitive — on the operator if that’s a State-owned company which is an avatar of the government? All that’s needed is an executive order that the government, in all its manifestations, will accept liability. The subdivision between PSU operator and government may be interesting but it’s unnecessary, complicating and misleading.

Next, the concept of capping liability. Everyone, including members of the government, assumed the bill caps liability for nuclear damage altogether. This is controversial both as a principle and in terms of the amount. But, again, it appears that’s not what the government means. Strict liability — which is akin to the automatic Rs 2 lakh damage for victims of a railway accident — is capped, but not civil or criminal liability. They remain unfettered. But then, why doesn’t the bill make that clear? And why didn’t ministers, who spoke in defence of it, clarify?

Now, the amount: Rs 500 crore for the operator. Everyone understood this was a cap. That, too, was how government ministers spoke of it. But, again, it’s not. A sub-clause states the government can increase or decrease the figure depending on the damage caused. And if you ask what is the relevance of the Rs 500 crore amount you discover it’s a guideline to help operators obtain insurance. Nothing more. The operator’s liability could be greater.

Of course, if you dig deeper it’s not so easily explained. If the operator is a PSU then it’s none other than the government itself. In that case, why does the operator need its own cap? Indeed, why does it need insurance? Governments neither subdivide their commitments nor insure them.

This takes us back to the issue I began with: does the need for a liability law suggest the nuclear sector is being opened to private players? Every thing in the bill makes sense if the answer is yes — the principle of a cap, the amount specified and the differentiation between the operator’s liability and the government’s.

This was, I suspect, the government’s intention but when the bill ran into trouble — provoking accusations of pandering to the interests of future American operators — it hastily announced that private sector participation is not envisaged. That got them off the American hook but made a nonsense of the bill.

The truth is all private operators want liability capped — the French, the Russians and any Indian who might enter this sector. Next, if nuclear power is the answer to India’s energy problems private players have to play a role. The government cannot do it alone. And, finally, if the cap is large enough you won’t have to explain it doesn’t fetter civil and criminal liability. No one would bother with them.

Alas, the government goofed.

The views expressed by the author are personal

First Published: Mar 20, 2010 22:53 IST