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GE, Westinghouse Await Nuclear Bill as Singh Set to Face Stormy Parliament
Indian Prime Minister Manmohan Singh faces an opposition buoyed by support for a recent nationwide strike when parliament meets today, promising a rough ride for legislation such as a bill to enable the entry of U.S. nuclear power companies.
The July 5 shutdown, triggered by an increase in fuel prices and escalating costs of food, grounded airlines, paralyzed road transport and shut offices as the main opposition Bharatiya Janata Party and communists, usually rivals, united to protest a cost of living rising at the fastest pace in Asia.
Passage of the Civil Liability for Nuclear Damage Bill will be a key test of Singh’s ability to advance his agenda, which has wobbled since winning elections last May. The bill aims to restrict compensation in the event of an accident and will allow U.S. companies, including General Electric Co., to bid for contracts.
“Opponents may create a situation where it will be a test of the government’s resolve to move ahead” with the legislation, said Mahesh Rangarajan, a New Delhi-based independent political analyst. Singh, whose ruling alliance is seven seats short of majority in the lower house, will have to win over smaller regional parties from outside his coalition.
Deadlock over the legislation may add to headwinds that have already delayed bills to provide food security for the poor, reserve more seats for women in the legislature, and open the insurance and retail sectors to greater overseas investment.
‘Stormy’ Session
Among 33 bills listed for consideration this session is the one to reduce the government’s stake in the State Bank of India to 51 percent and allow the nation’s biggest lender to boost capital by selling shares. Parliament will sit until Aug. 27.
“It will be a stormy session and the government will be put on the mat because the opposition feels emboldened by the response to the strike,” Rangarajan said. “They will be united at least on” the issue of rising prices.
The benchmark wholesale price inflation index jumped 10.6 percent in June from the year before, after a 10.2 percent gain in May. Consumer prices paid by industrial and farm workers in India are increasing at almost 14 percent annually, the highest among 17 countries tracked by Bloomberg in Asia-Pacific.
“Price rise will be at the forefront of issues we will raise in parliament,” Rajiv Pratap Rudy, a BJP spokesman, said in a phone interview. “We will scream at the government for its failure to check spiraling prices.”
The new found common purpose between left parties and the Hindu-nationalist BJP is likely to fracture on issues other than the cost of living, said Satish Misra, a political analyst at New Delhi-based Observer Research Foundation.
Temporary Unity
“Ideological divisions among opposition parties will provide enough room for ruling coalition to maneuver its way through” the session, Misra said. “The unity created on price rise is temporary.”
The nuclear liability bill, which seeks to make nuclear reactor operators solely responsible and to cap damages, is being scrutinized by a panel of lawmakers and is likely to reintroduced in parliament this session. The bill triggered a storm when it was first presented to lawmakers in May, with the opposition arguing it will shield American technology suppliers from compensation claims.
Indian opposition to the bill was bolstered June 6 by public outrage over two-year jail terms awarded to former senior employees of a local unit of Union Carbide Corp. for their role the 1984 Bhopal gas tragedy. The sentencing reignited anger over compensation and punishment in the case.
Union Carbide
Midland, Michigan-based Dow Chemical Co., the world’s second-largest chemical maker, acquired Union Carbide in 1999. Dow says all liabilities were settled in a $470 million out of court settlement Union Carbide agreed with the Indian government in 1989.
“If the concerns of the people are not addressed or accommodated in the nuclear liability bill, then there will be problem,” said S.S. Ahluwalia, a BJP member of the parliamentary panel scrutinizing the liability bill.
Approval of the bill will help nuclear technology suppliers including Westinghouse Electric Co. and GE Hitachi Nuclear Energy, controlled by Tokyo-based Hitachi Ltd. and Fairfield, Connecticut-headquartered GE, compete for $175 billion of expected orders.
European nuclear equipment providers, including Paris-based Areva SA and Russia’s Rosatom Corp., are covered by sovereign immunity because they are fully or partially controlled by governments. All atomic energy facilities in India are run by state-owned Nuclear Power Corp.
-- With assistance from Archana Chaudhary in New Delhi. Editors: Mark Williams, Sam Nagarajan
To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net
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