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Parts of memorandum will be released; based on these, operators can draw up contracts

Published: 04th February 2015 06:00 AM  |   Last Updated: 04th February 2015 03:55 AM   |  A+A-

NEW DELHI:After handing over the ‘memorandum of understanding’ reached over application of the civil nuclear liability act to the US, the government plans to make a “substantive part” of the document public to act as a guide for operators and suppliers to draw up commercial contracts.

Within a month, and perhaps even as early as this week, India will hand over the memorandum to the US. This sets out the understanding reached between the two sides on the interpretation of the 2010 Civil Liability for Nuclear Damage Act.

This will be in the form of the summary of records of meetings of the contact group, case law examples and legislative history.

The framing of the memorandum is one of the steps decided as part of the ‘deal’ between India and the US. “We plan to hand this over to the US this week,” said a senior official.

The document will lay out the understanding reached over the interpretation of Section 17 (b), which allows an operator to take “right to recourse” from a supplier and Section 46 that says nothing can prevent the operator from being sued by any other law.

It will also cover other clauses like Section 4, which spells out when an operator is liable for damage as well as Section 6, which deals with the cap on liability.

It was clarified that contrary to some reports, this was not a “memorandum of law”, as it cannot be used as a legal document. The memorandum, which is a diplomatic document between two governments, would not be made public. But a major part of the memorandum will be included in an FAQ paper that will be publicly available soon and will be uploaded on the websites of MEA and department of atomic energy.

So far, Indian officials described the feedback from private companies as “cautiously welcoming”. The firms, State-run Nuclear Power Corporation of India Limited, GE-Hitachi and Westinghouse, were part of the deliberations of the first two rounds of meetings of the contact group in December and early January. They were not part of the final round in London over two days, but have been briefed about the deal.

While the act remains intact, the supplier has been protected through the creation of “India Nuclear Insurance Pool” by General Insurance Corporation and four other public sector insurance firms.

While the insurance companies will contribute Rs 750 crore to the pool, an equal amount would be given by the government “on a tapering basis”. As per sources, the assessment of the finance ministry is that the Centre has to be part of this pool only for 4-5 years, before it becomes profitable on its own.

Officials disputed the narrative that the deal basically shifts the liability to the taxpayer, pointing out that government has to only make a pay-out in the case of a disaster. “Half of the premium will be coming to the government. So, you are earning money without putting anything into the pool technically,” claimed the official.

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