Russia Ups Bulgarian Belene NPP Claim to EUR 1 B

Business » ENERGY | September 11, 2012, Tuesday // 12:52
Russian Atomstroyexport Ups Bulgarian Belene Claim to EUR 1 B: Russia Ups Bulgarian Belene NPP Claim to EUR 1 B Russian Atomstroyexport has cautioned that Bulgaria faces huge penalties for the termination of the Belene NPP project. Photo by BGNES

The Russian state company Atomstroyexport increased to EUR 1 B its claim against Bulgaria's National Electric Company, NEK, over the country abandoning the "Belene" project.

The case of Bulgaria having to reimburse Atomstroyexport for scrapping plans to build a second Nuclear Power Plant, NPP, in the Danube town of Belene is tried by the International Court of Arbitration in Paris.

Rosatom, subsidiary of Atomstroyexport, the Russian contractor selected to build the Belene NPP, filed a lawsuit for EUR 58 M against Bulgaria's NEK at the International Court of Arbitration in Paris in the summer of 2011.

On Tuesday, Atomstroyexport, cited by the Russian news agency ITAR-TASS, announced that it is upping the claim over the early termination of the project by the Bulgarian government and the expired agreement from November 2006, while NEK continues to refuse to compensate the company for the inflicted losses.

The claimed amount includes all work already completed for the project, the cost of the equipment and the losses. Atomstroyexport further note that several Russian plants have been involved in the long process of making this equipment – usually taking anywhere between 6 months and 3 years.

The noted Russian subcontractors have finished the casing of the reactor and the devices inside it; they conducted tests of the casing; completed the reservoirs of the emergency cooling system, the pressure compensating devices, the steam generators and the cofferdams for the staff. All of the above is stored in warehouses because NEK refuses to accept it.

The claim further notes that Atomstroyexport paid for the orders not only with the money received by NEK, but by loans it had taken. In addition, on the request of the Bulgarian Agency for Nuclear Regulation in the aftermath of damage at Japan's Fukushima NPP after the March 2011 devastating earthquake there, the Russian company has prepared stress tests in compliance with criteria of the International Atomic Energy Agency, IAEA. The tests have been examined by IAEA experts and received positive safety assessments.

In 2008 – 2010, the Russian company has conducted all necessary engineering and geological studies and excavations at the NPP site and built the needed infrastructure in order to start construction works.

After the construction of the 2000 MW plant by Atomexportstroy had been delayed with annexes 15 times, at the end of March 2012, the Cabinet of Prime Minister, Boyko Borisov and the ruling Citizens for European Development of Bulgaria party, GERB, formally abandoned the project, declaring it economically unfeasible.

In October 2011, Bulgaria and Russia reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.

The greatest issue over which Bulgaria and Russia had been haggling for the past two years under the Borisov Cabinet was the price of the project, with Russia insisting it should be no less than EUR 6.3 B, while Bulgaria was demanding a price of no more than EUR 5 B.

After selecting the Russian company Atomstroyexport, a subsidiary of Rosatom, 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 Sergey 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 was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

In November 2010, shortly after a visit to Sofia by Russian PM Putin, NEK and Rosatom signed a memorandum providing for a final fixed price for the two reactors of EUR 6.298 B.

According to the non-binding memorandum expiring on March 31, 2011, Bulgaria's NEK would have had a share of 51% in the Belene NPP, Rosatom – a share of 47%, Finnish company Fortum - a share of 1%, and French company Altran Technologies - a share of 1% with an option to increase it. Serbia had expressed interest in acquiring a share of 5%-10%.

In mid-March 2011, apparently acting on concerns caused by the situation in Fukushima NPP, the European Commission confirmed that it wanted to reexamine the Belene NPP project - once Bulgaria finds an investor for it - even though it already approved it back in 2007.

Even before Bulgaria formally scrapped the Belene project, NEK and Rosatom had claims for one another, amounting to roughly EUR 60 M each over disputes for provided services and equipment deliveries and buy-back agreements that they have taken to international arbitration courts.

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Tags: Atomstroyexport CEO, Russia, lawsuit, Atomstroyexport, equipment, Fukushima, NEK, IAEA, International Court of Arbitration in Paris, BEH, Belene, Belene NPP, Nuclear Power Plant, NPP, Rosatom, Atomstroyexport, Prime Minister, Boyko Borisov, Siemens, Areva, Rosatom, Atomstroyexport, Belene, Nuclear Power Plant, National Electric Company, Fortum, altran, NPP, Altran Technologies, Russia, Belene, Moscow, Nuclear Power Plant, Bulgarian Energy Holding, danube, Vladimir Putin, claim, GERB
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