NEW DELHI, Sept 25 (Reuters) – India plans to set up a nuclear liability fund to cover accident compensation in excess of 15 billion rupees ($169 million) owed by plant operators, in a bid to ease risk-sharing concerns among global suppliers and private firms, two government sources said.
The move holds out potential to unlock long-stalled private and foreign investment in the nuclear industry, by aligning India’s compensation framework with global norms, added the sources, who have direct knowledge of the matter.
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The statutory fund, proposed by a new atomic energy bill, would supplement an operator’s capped liability, in a shift from the current ad hoc payout system, said the sources, who sought anonymity because the plan has yet to be made public.
“The fund seeks to bolster the government’s ability to compensate victims in the event of an accident,” said one of the sources.
India’s atomic energy department, the prime minister’s office and the finance ministry did not respond to requests for comment.
India, which plans to expand nuclear power capacity 12-fold by 2047, is relaxing rules to end a decades-old state monopoly and a stringent liability provision so as to free up private participation and attract foreign suppliers of technology.
Prime Minister Narendra Modi’s government is in the final stages of drafting legislation expected to be introduced in parliament’s winter session in December, the sources said.
It aims to lure private companies into the areas of atomic energy generation and uranium mining, with foreign players taking minority stakes in nuclear power plants.
It also wants to ease nuclear liability laws by removing the provision exposing suppliers to unlimited liability for accidents. The planned fund would provide a clear legal mechanism to finance compensation beyond the operator’s cap.
For insurance coverage against nuclear accidents, India now relies on a nuclear insurance pool, a policy tool launched in 2015 but not embedded in law.
Though designed to support operator and supplier liability under legislation dating from 2010, it failed to overcome the caution of foreign firms from nations such as France and the United States.
Once passed, the new bill will replace the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010.
($1=88.7280 rupees)
Reporting by Sarita Chaganti Singh; Editing by Clarence Fernandez