Russia Unwavering in Court Battle for Bulgarian NPP

Business » ENERGY | June 7, 2013, Friday // 20:11| Views: | Comments: 2
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Russia Unwavering in Court Battle for Bulgarian NPP: Russia Unwavering in Court Battle for Bulgarian NPP Bulgaria decided to abandon plans to build its second nuclear power plant in March 2012 after failing to agree on its cost with Russian company Atomstroyexport, a subsidiary of Rosatom, and find Western investors. Photo by EPA/BGNES

Russia's Atomstroyexport has submitted Friday documents for its claim against Bulgaria's National Electricity Company, NEK, for the project to build a second nuclear power plant in the Danube town of Belene.

The documents were filed with the International Court of Arbitration in Paris in accordance with the updated schedule of the arbitration hearing, the Atomstroyexport press office announced.

NEK will have an opportunity to present its objections in the dispute.

"Atomstroyexport will keep protecting its interests in the arbitration suit over the illegal termination of the Belene NPP construction project. It remains open to reasonable and specific Bulgarian proposals for solving the dispute," the statement reads.

The final hearings in the case are scheduled for July 2014.

Genadiy Tepkyan, Vice President of Atomstroyexport, said Wednesday that the company is ready to file a new EUR 1 B claim against Bulgaria by the end of this week.

Last week, Bulgaria's newly sworn-in Prime Minister Plamen Oresharski, elected on the Socialist mandate, hinted that the Belene NPP project may be revived.

Bulgaria's formerly-ruling center-right Citizens for European Development of Bulgaria party, GERB, government scrapped the Belene project in March 2012, declaring it economically unfeasible.

The pro-Belene Bulgarian Socialist Party, BSP, then launched a petition for a referendum on the Russian-Bulgarian project. The referendum took place on January 27, 2013.

Discussions on the abandoned project were renewed when Rosatom subsidiary Atomstroyexport upped its claim against NEK to EUR 1 B, though Rosatom said it was open for an out-of-court settlement of the arbitration suit.

In the middle of July 2012, Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to the arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

The next day the Bulgarian company said it was ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.

Three months later, on September 11, Rosatom Corp., Russia's state-run nuclear company, increased the claim to EUR 1 B.

Atomstroyexport said it increased the claim to cover construction work and production costs of the two canceled nuclear reactors.

After it was first started in the 1980s, the construction of Bulgaria's second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.

After selecting the Russian company Atomstroyexport to build a two 1000-MW reactors at Belene and signing a deal for the construction, allegedly for the price of EUR 3.997 B, with the Russians during Putin's visit to Sofia in January 2008, in September 2008, former Prime Minister Stanishev gave a formal restart of the building of Belene. At the end of 2008, German energy giant RWE was selected as a strategic foreign investor for the plant.

The Belene NPP has been de facto frozen since the fall of 2009 when RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

Shortly afterwards BNP Paribas SA, France's largest bank by market value, which was hired by the previous Socialist government to help fund the construction of Belene, ditched the project in February 2010.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on GERB's government to find new shareholders while it redefined the scope of investment it needs.

NEK initially held a 51% stake in the scheme and PM, Boyko Borisov's Cabinet planned to cut its shares in the project to 20-30%, which will still allow the country to keep its blocking quota.

On January 27, 2013, Bulgarians had to answer in the referendum the following question: "Should nuclear energy be developed in Bulgaria through the construction of new nuclear power units?"

Under the law, the referendum results imposed for the Belene NPP to be put back on the Parliament's agenda, as voter turnout slightly exceeded 20%. 61% of the voters said "yes" to the construction of a new NPP; 39% cast a "no" ballot.

On February 27, 2013, Bulgaria's Parliament confirmed the country's decision to abandon the Belene NPP project.

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Tags: parliament, Referendum, consultant, HSBC, NEK, BEH, GERB, NPP, Nuclear Power Plant, Rosatom, Atomstroyexport, Russia, ASE, International Arbitration Court in Paris, Arbitration, arbitration court, temporary, RWE, Plamen Oresharski
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» To the forumComments (2)
#2
Tania OZ - 8 Jun 2013 // 02:13:01

And furthermore, Russia is very angry and put out because they know very well that their filthy little comrades in BG siphoned millions out of the project. We all know that big brother doesn't like to be outsmarted/double crossed by their own minions. Go sue Stanishev and his filthy mates or cut your losses.

#1
Tania OZ - 8 Jun 2013 // 01:42:40

What I have to say about this bloody mess is largely unprintable.

But I will say that it is never a good idea to be engaging in "business" with Russia and The Kremlin or BG's smaller Kremlin associates.

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