Bulgaria Drives Russia to Despair over Belene NPP - Report

Business » ENERGY | February 14, 2011, Monday // 18:19| Views: | Comments: 2
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Bulgaria: Bulgaria Drives Russia to Despair over Belene NPP - Report The future of the Belene NPP remains unclear as Russia considers abandoning the project, according to the Russian press. Photo by BGNES

Russia is perplexed as to whether to keep its efforts for the construction of the second Bulgarian nuclear power plant "Belene" or to renounce the deal and seek penalty payments from Bulgaria, according to the Rossiyskaya Gazeta daily.

In an article on Monday, the papers cites experts as saying there might be a "breakup" between Bulgaria and Russia over the "long-suffering project" as the sides have failed to agree on a final price and a funding mechanism.

Russia's state nuclear company Rosatom and its subsidiary Atomstroyexport, which is supposed to build the 2000-MW Belene nuclear plant, are in a tough dilemma as to how to handle the situation, the Rossiyskaya Gazeta says.

A Rosatom source is cited as saying that the corporation has been considering seriously a termination of the deal with Bulgaria since December 2010 as statements from the Bulgarian government are said to have disavowed a price memorandum made in November.

Almost desperate to get the current leadership of Bulgaria to take adequate steps to ensure that the start of building the nuclear power plant... "Rosatom" talked openly about a possible rupture of the agreements concluded on the basis of international competitive bidding, explans the article.

According to the report Russia will make more money – EUR 200 M – if it gets compensations from Bulgaria over a failed contract, while it will make only EUR 150 M if it completes the construction of the Belene plant.

"For Russia, in the face of Rosatom, is now more feasible to leave the project, to recover damages through the courts rather than continue to work with the Bulgarian authorities", - said Russian analyst Dmitry Kumanovsky whose opinion has officially been issued by the press center of Russia's nuclear energy and industry.

In his view, the current leadership of Bulgaria is under pressure from foreign governments to deliberately lead to a deadlock the situation with the construction of nuclear power plant based on Russian technology.

Kumanovsky said that as the project has dragged on in the last five years, its price grew because of the rising prices of construction materials, equipment and installation.

He does acknowledge that from a political point of view Russia would lose if it pulls out by losing Bulgaria as one of its traditional markets for its technologies.

The paper says that there is a timid optimism in Sofia where just last week Atomstroyexport arranged a seminar for Bulgarian subcontractors on the organization of the construction work at Belene.

"I do not really believe that Russia will abandon the project," the expert from the Bulgarian Energy Forum, Professor Atanas Tasev, is quoted as saying, "But it can stimulate the Bulgarian government to speed up bureaucratic procedures. "

The head of the Bulgarian state construction company Glavbolgarstroy Stanoy Milashevin is quoted as saying that the builders in Bulgaria are eager for the Belene project to start.

"If the construction is terminated, both sides will be affected," the head of the Center for Political Research of the Economics Institute of the Russian Academy of Sciences, Boris Shmelev.

He thinks that Russia will lose its geopolitical position in the Balkans if it abandons Belene, and that even with all the existing problems it is much more sensible "to bring the project to the end and use the results, instead of throwing it halfway."

Bulgaria's Finance Minister Simeon Djankov recently said that the acceptable price that can be paid to Russia for the construction of the Belene NPP is about EUR 5 B.

Russian state energy company Rosatom may drop its project to build the Belene Nuclear Power Plant in Bulgaria, said the French La Tribune daily, in a report published last week saying that Rosatom's subsidiary, Atomstroyexport, has advised it to withdraw from the project in a letter.

At about the same time, Atomstroyexport sent a press release to the Bulgarian media, stating that the power plant will be built. As of now, the Bulgarian National Electric Company (NEK) and Atomstroyexport have signed 11 additional agreements on the construction of the plant after the initial document was signed on November 29, 2006, but it is still unclear whether a new one will be signed in March.

In November, shortly after a visit to Sofia by Russian PM Putin, Bulgaria's National Electric Company NEK and Russian state company Rosatom signed a memorandum providing for a final fixed price for the two reactors of EUR 6.298 B.

This sum is still not final since the document is not binding; a final binding agreement for the establishing of a joint company for Belene is expected to emerge in 4-5 months, according to Rosatom head Sergey Kirienko, who was in Sofia to sign the document.

The other non-binding documents on Belene signed at the same time provided for participation in the project of Finnish company Fortum with a share of 1%, and of French company Altran Technologies with a share of 1%-25%. NEK is to keep a majority share of 51%, while Rosatom is also expected to have a share of 25%.

Serbia has expressed interest in acquiring a share of 5%-10% but the talks for that have not been finalized yet.

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Tags: Rosatom, Atomstroyexport, Belene, Nuclear Power Plant, National Electric Company, Fortum, altran, NPP, Altran Technologies
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» To the forumComments (2)
Nellieherself - 15 Feb 2011 // 20:49:02

"Bulgaria Drives Russia to Despair over Belene NPP"

This "drives to despair" sounds like a Russian novel. Dr. Zivago, Anna Karenina or War and Peace anyone?

dianneh - 15 Feb 2011 // 11:06:39

According to the report Russia will make more money – EUR 200 M – if it gets compensations from Bulgaria over a failed contract, while it will make only EUR 150 M if it completes the construction of the Belene plant.

Where's the argument ?

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