Canada N-firm wary of starting work in India

November 09, 2012 - 4:59:24 am

BANGALORE: Despite the high-profile nuclear agreement this week between Canada and India, Canadian engineering firm SNC Lavalin Group Inc will not be rushing to build reactors in India until its concerns over liability are addressed.

SNC Lavalin International President Ronald Denom said yesterday that his company would proceed cautiously in light of Indian liability rules, which have so far sidelined US companies such as General Electric Co.

“SNC Lavalin takes a very conservative approach to such issues and will proceed with caution until such time that we are satisfied that the matter has been clarified and our concerns have been addressed,” Denom said.

Indian nuclear liability rules oblige firms rather than the Indian state to pay for the damage from an industrial accident, making some companies question whether it is worth it.

The issue involves legalese but could be critical to India’s ambitious plans to expand vastly its nuclear energy production to fuel a fast-growing economy and expanding middle class.

India aims to lift its nuclear capacity to 63,000 megawatts in the next 20 years by adding nearly 30 reactors. The country currently operates 20 mostly small reactors at six sites with a capacity of 4,780 MW, or 2 percent of its total power capacity, according to the Nuclear Power Corporation of India Limited.

India had been isolated for years over its atomic programme following nuclear weapons tests in 1974 and 1998.

A landmark nuclear energy deal signed in 2008 between Washington and Indian Prime Minister Manmohan Singh’s government set the pace for Canada and others.

Canada reached a nuclear cooperation deal in 2010, and this week Singh and Canadian Prime Minister Stephen Harper announced the conclusion of negotiations on rules that should soon enable the supply to India of uranium and reactors.

Denom accompanied Harper’s delegation for part of his November 4-9 visit to India, and said soon after the Canadian-Indian announcement on Tuesday that SNC Lavalin would normally now request that Canada be accorded the same treatment as the Russians, the French and the Americans and that a site be designated in India for the implementation of at least a twin-unit nuclear power station.

SNC Lavalin has a division that produces Candu reactors, which were once made by the Canadian government and which have been sold around the world. REUTERS

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