logo

Insurance first

In a major development, the Government of India on Saturday launched an insurance pool to the tune of Rs 1500 crore, which is mandatory under the Civil Liability for Nuclear Damage Act (CNLD). This measure, which is part of the historic Indo-US Civil Nuclear deal, seeks to offset the financial burden of foreign nuclear suppliers in the event of a disaster. Clauses in the CLND Act, which give the operator the Right to Recourse and allow it to sue the suppliers in case of any accident, were seen as being a major hindrance to the growth of the nuclear industry. 

These concerns led to the formation of the Indian nuclear insurance pool. Under the Rs 1,500-crore insurance pool, set up by General Insurance Corporation of India (GIC Re) and 11 other non-life insurers including other public and private sector insurance companies, policies offered will be a nuclear operators liability insurance policy and a nuclear suppliers’ special contingency insurance policy. Essentially, the plan laid out by state-run General Insurance Company of India (GIC Re) and other public sector undertakings proposes that insurance would be bought by foreign companies contracted to build nuclear reactors in India. 

These foreign companies, however, would then recoup the cost of the premium paid to GIC Re by charging a higher amount to its consumers in India. New Delhi may have found ways to circumvent the nuclear liability law, by inadvertently shifting the burden of a nuclear accident to the unwilling retail consumer since companies will be charging more from them in the future. Until that time, the public exchequer <g data-gr-id="27">insures</g> for any nuclear liability. The Government of India, however, has disputed this claim. According to the Centre, the implications of the insurance pool on the unit energy cost of nuclear power will not be significant and poses no further burden on the taxpayer.

One of the pertinent fears raised by civil society activists is that in not addressing the liability issue more comprehensively, however, it has engendered a potential Union Carbide-like situation where the victims could end up receiving paltry compensation for their losses. Such fears, however, must be understood in a certain context. Admittedly, the world has witnessed devastating nuclear accidents like the Fukushima disaster four years ago in Japan and Ukraine’s Chernobyl in 1986. However, atomic scientists across the board have been constantly working towards evolving better safety standards in nuclear power plants. With over 25 percent of our population bereft of electricity connection and power generation dropping by 0.5 percent in May, compared with 2 percent in the previous month, we need nuclear energy to augment our electricity generation capacity. In its bid to accelerate economic growth by an expansive 7.5 percent, power generation will be a major factor. Although the government has made certain compromises on the CNLD, one hopes that the consumer does not bear the brunt of any ill-fated nuclear power events. 

MPost

MPost

Our Contributor help bring you the latest article around you


Exclusive

View All

Latest News

View All
Share it
Top