Accused of bribing Indian officials, US firm Westinghouse goes scot-free

Even as the government is ready to compromise the country’s sovereign interests by diluting nuclear liability clause to favour a US company, Westinghouse Electric Company (WEC), another company of the same group – Westinghouse Air Brake Technologies Corporation (WABTEC)— has been allegedly making huge illegal payments to bribe Indian officials.

The government is about to close an investigation against WABTEC which was initiated in 2009 when the Central Bureau of Investigation (CBI) had registered a preliminary enquiry against it. However, sources revealed that due to the influence of top CBI officials, the agency is all set to close the case.

This is alarming as there is a proposal to sign a ‘Preliminary Contract’ between Nuclear Power Corporation of India Ltd (NPCIL) and Westinghouse Electric Company (WEC) to buy six 1000 MW nuclear reactors at a cost of USD 15.16 million for a power plant to be set up at Chayya-Mithivirdi in Gujarat. Such a sensitive deal with a group (Westinghouse) which has already been accused of bribing Indian officials could put country’s national interests in jeopardy. On 2 December, 2009, then minister of state in the Ministry of Personnel, Prithviraj Chavan, had said in Lok Sabha: ‘The Indian ambassador to the United States had informed New Delhi that several references regarding illegal payments to the officials in India have been made in the US report on the Foreign Corrupt Practices Act (FCPA) and Anti-corruption Enforcement for the second half of 2008 and early part of 2009.’

One of the companies against which these allegations were levelled was Westinghouse Air Brake Technologies Corporation and its Indian subsidiary Pioneer Friction Ltd. Later, the Central Vigilance Commission (CVC) asked the CBI to look into each of these instances of corruption and furnish a report.

Chavan had further said: ‘In view of the report of improper payment to a key official in Ministry of Railways all dealings with Pioneer Friction Ltd (Kolkata) and WABTEC (USA) have been suspended.’

A political storm had erupted here last week following Attorney General G E Vahanvati’s statement that it is up to the nuclear plant operator, in this case NPCIL, to invoke section 17 of the Civil Liability for Nuclear Disaster Act regarding liability of suppliers in case of a mishap paving way for repudiation of a right that Parliament explicitly wrote into section 17(b) of the law to ensure that foreign suppliers don’t go scot-free if a nuclear accident is traced back to equipment or material with patent or latent defects or sub standard services.

The Cabinet Committee for Security (CCS) is scheduled to meet on Tuesday to take a call on the proposal even as it faced a lot of criticism from the 

opposition parties.  

Department of Atomic Energy (DEA) last Thursday had even said that NPCIL will enter into a preliminary contract with Westinghouse only with the approval of Atomic Energy Commission (AEC) and the government.

This evoked a sharp reaction from opposition BJP. Party leaders had said India compromising on crucial clauses in the Nuclear Liability Act regarding fixing of liability is worrisome and alleged that Prime Minister Manmohan Singh has allowed this to give a gift to American companies during his forthcoming visit to the United States.