Atomstroyexport: No Comment on Belene NPP Dispute with Bulgaria

Energy | May 18, 2010, Tuesday // 09:56|  views

Bulgaria's NEK and Russia's Atomstroyexport might be tangled in a dispute over the Belene NPP contract, indicates a reported move of the Russian company which is said to have hired a US law firm to defend its interests. Photo by BGNES

Russian state-owned company Atomstroyexport, which is supposed to construct Bulgaria’s second nuclear power plant at Belene, has failed to deny or confirm information that it has hired a US consultancy over possible future disputes with the Bulgarian government.

Czech business news website has reported that Atomstroyexport has signed a deal with the leading US law firm Sidley Austin LLP in order to defend its interest in the event of arbitration of a dispute with the Bulgarian state-owned National Electric Company NEK over the future Belene Nuclear Plant.

The press office of Atomstroyexport has declared that the Russian company has a contract with Bulgaria’s NEK which expires at the end of September 2010, and that it would not comment on company’s further actions once the contract is over, as cited by BGNES.

The Czech business edition points out that US consultancy Sidley Austin LLP has specialized in precisely the kind of arbitration that involves disputes between investors and governments, and that it has won several similar suits.

The Czech website refers to a report of the French newspaper Les Echos citing Bulgarian Prime Minister Boyko Borisov as saying at the beginning of May 2010 that his government intended to freeze the construction of the Belene Nuclear Power Plant until it finds a strategic foreign investor in the future plant.

“Our country does not have money to pay for the construction of a nuclear reactor. We will build it as soon as we find an investor,” Borisov is quoted as saying.

During his meeting with the Prime Minister of the German province Baden-Wuertemberg on Monday, Borisov reiterated his intention to find a Western European strategic investor for Belene, possibly a German company.

The previous strategic investor selected by NEK, the German giant RWE, pulled out of the Bulgarian nuclear project in the fall of 2009.

In the spring of 2010, the Russian state offered to provide an EUR 2 B loan in order to feed the construction of the Belene NPP while the search for a new investor lasts in exchange for a share of the future plant. However, the Bulgarian government has not reached a formal decision on the idea, and a Deputy Economy Minister has even indicated that it did not want to accept the Russian offer.

In the spring of 2009, Russian Prime Minister Vladimir Putin suggested to the former Socialist-led government of Bulgaria of Prime Minister Sergey Stanishev a Russian government loan of EUR 4 B – which according to the estimates at the time was supposed to be the total cost of the construction. However, according to the Borisov center-right government, which came to power last summer, the sum is going to be around EUR 10 B.

The Czech business site reminds that the construction of the Belene NPP by Atomstroyexport was restarted in 2007 (after being abandoned in the early 1990s), and that the Russian company has to build two VVER reactors of 1000 MW. At the same time, it also points to the recent deal between Russia and Turkey for the construction of a Turkish nuclear plant with four such reactors for USD 20 B.

The Bulgarian government of the GERB party has not given any indication that a dispute with Atomstroyexport is looming because it might terminate the contract with the Russian state company for the construction of the Belene NPP.

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Tags: Atomstroyexport, Belene NPP, Nuclear Power Plant, Russia, Sidley Austin LLP, dispute, Boyko Borisov, Prime Minister, NEK


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