Rooppur Nuclear Power Plant: Who will bear insurance liability?

The first consignment of nuclear fuel (uranium) for the Rooppur Nuclear Power Plant (RNPP) is scheduled to arrive in Bangladesh from Russia in October. The fuel will be taken to the project area in Ishwardi of Pabna from Hazrat Shahjalal International Airport in Dhaka. Foolproof security will be ensured that time. But it is yet to be finalised who would bear the economic liabilities of any loss due to nuclear incidents while carrying the fuel.

The Bangladesh Atomic Energy Commission already sent a letter to the science and technology affairs ministry in April for insurance regarding any loss due to nuclear incidents.

As per the law, the power project’s operator Nuclear Power Plant Company Bangladesh Limited (NPCBL) will act to ensure the insurance to meet the economic loss due to any nuclear incident. But NPCBL, which is being operated under the Bangladesh Atomic Energy Commission, has said that the power plant is yet to generate income as it has not begun production as yet and so is not in a position to pay premium every year. Considering everything the NPCBL is not in a position to open insurance right now. But the government can take charge of this.

Bangladesh Atomic Energy Commission chairman Ashok Kumar Paul, in the letter sent to science and technology affairs ministry secretary Ziaul Hasan, said currently no government or private insurance organisation in Bangladesh has any experience or capacity to run policy for a highly technical establishment like Rooppur Nuclear Power Plant. But he thinks it would be rational to open the insurance account with any government company.

The letter further said if the insurance account is opened now, the cost of premium will be considered as an investment in the project. As a result, it would affect the power tariff rate. In this context, the government instead of the project operator could bear the insurance cost for any pecuniary loss during carrying the fuel of RNPP from Dhaka to the project area, its conservation and use.

Bangladesh Atomic Energy Commission’s chief engineer Mahmud Hossain told Prothom Alo that no company in the country has any experience of operating insurance for loss due to nuclear incidents like Rooppur Nuclear Power Plant. Help of another country has to be taken, he added.

Section 45 of Bangladesh Atomic Energy Commission act said, “The maximum amount of liability in respect of each nuclear incident shall be BDT equivalent of 300 million Special Drawing Rights (SDRs) or the amount specified by the Government by notification and the liability of an operator or overseas operator for each nuclear incident shall be prescribed by regulations.” SDR is the reserve currency of International Monetary Fund (IMF). The value of 1 SDR was equivalent to USD 1.3478 on Thursday. As per that calculation, the highest amount of liability in each incident would be US $404.3 million, which would be Tk 42.86 billion. But the number and per cent of premium installments are yet to be finalised.

Several inter-ministerial meetings have already held about who would operate the insurance of loss due to nuclear incident. Sadharan Bima Corporation said they have the capacity to run the insurance. The matter has already been informed to the Bangladesh Atomic Energy Commission.

Sadharan Bima Corporation officials said many people in the country think no local organisation is in the situation to operate so large insurance. But that’s a misconception. People’s outlook towards local insurance will change through operation of large insurance like that of Rooppur Nuclear Power Plant. This will increase people’s reliability too, they added.

Speaking about the matter, Sadharan Bima Corporation general manager Wasiful Hoq told Prothom Alo they operated the insurance during the construction of the Rooppur Nuclear Power Plant. They have the experience of reinsuring with large insurance companies of the world.

He further said Nuclear Power Plant Company Bangladesh Limited ran the risk insurance of under construction Rooppur Nuclear Power Plant project at Sadharan Bima Corporation.

The US $12.65 billion insurance was opened in 2019. As per the agreement, Sadharan Bima Corporation has to be paid premium of US $50 million in four installments.

Meanwhile, science and technology affairs ministry officials said the nuclear fuel will arrive at Hazrat Shahjalal International Airport via airways and then the law enforcement agency members will transport it to the project area. As per the rules, the operator would be responsible if any damage is incurred that time. At the same time, the company would be liable to manage the insurance. But the government could bear the liability if it wants as NCPBL is a government company. The Bangladesh Atomic Energy Commission has sought a guarantee of that from the government.

Science and technology affairs minister Yeafesh Osman and the ministry’s secretary Ziaul Ahsan declined to talk about the letter of Bangladesh Atomic Energy Commission.

However, wishing not to be named, an official of the ministry told Prothom Alo that they have got the letter of BAEC. A meeting will be held on whether the government instead of the operator (NCPBL) would bear the liability of insurance of loss due to any nuclear incident. The meeting will also discuss where the insurance will be opened.

The official further said the state could take the responsibility of any loss due to any nuclear incident. But the insurance has to be opened at any local insurance organisation

* The report is originally published in the online edition of Prothom Alo and has been rewritten in English by Shameem Reza