N-liability waiver may burden tax payer: AG

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MEA-Favoured Move Legally Fine, Says Top Law Officer
Dhananjay Mahapatra TNN

New Delhi:Attorney general G E Vahanvati is sceptical of the ministry of external affairs’ suggestion of granting nuclear liability waiver to the Russian manufacturer for Units 3&4 of Kudankulam Nuclear Power Plant on the ground that though it could be legal under the 2008 inter-governmental agreement, it may not be prudent.
The Centre, already facing public protests and litigation in Supreme Court on issues ranging from liability waiver to safety of KNPP Units 1&2, had sought the AG’s opinion on the legality of a proposal before the Cabinet Committee on Security, which read: “Authorize Nuclear Power Corporation of India Ltd not to exercise operators’ right to recourse under Section 17 of the Civil Liability for Nuclear Damages Act, 2010.”
Under the Inter-Governmental Agreement (IGA) of December 5, 2008, it was agreed to set up additional nuclear power plant Units 3&4 at Kudankulam. Russian organization Atmostroyexport (ASE) submitted a techno commercial offer (TCO) for the scope of work including the terms related to nuclear risk and liabilities for the construction of two additional units at Kudankulam to Nuclear Power Corporation of India Ltd (NPCIL) in June 2009.
Keeping in mind that the Civil Liability for Nuclear Damages Act, 2010 came into force on November 11, 2011, the AG said: “The views of the MEA cannot be said to be legally wrong but a question may arise about the advisability of such a waiver, particularly when NPCIL is a public sector undertaking and the failure to provide for and have recourse against supplier would ultimately impact public funds.”
Vahanvati added, “Nonrecourse or limited recourse may entail a burden on the tax payer, particularly when the nuclear programme is being implemented through a PSU and having regard to the provisions of Section 7, where the ultimate liability is that of the central government.”
The top law officer was aware that it was a serious policy issue resting in the domain of the executive, but he decided to remind the government that identical issues were pending before the apex court.