Hungary's Paks Nuclear Deal Faces European Investigation

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Hungary's plans to build a €10 billion ($13.6 billion) nuclear power plant (NPP) at Paks using Russian money is being investigated by the European Commission (E.C.).

The E.C. has confirmed that an investigation is underway into possible anti-trust violations which, if proved true, will lead to the project being delayed or potentially scrapped.

"The award of the Paks nuclear power plant expansion project without a tender procedure has been brought to the attention of the European Commission," an E.C spokesperson confirmed to EuroNews. "Our services are currently examining this issue. And we are in the process of clarifying it with the Hungarian authorities."

In December the Hungarian government went ahead and signed a series of implementation contracts with Russia's Nizhny Novgorod Engineering Company Atomenergoproekt (NIAEP) (Moscow, Russia) for the construction of two new 1,200-megawatt (MW) nuclear reactors. For additional information, see December 17, 2014, article - Hungary-Russia Sign Nuclear Contracts.

This followed a deal last July in which the Hungarian government approved a €10 billion ($13.6 billion) financing package from Russia to build the new reactors. For additional information, see July 11, 2014, article - Hungary Signs €10 billion Nuclear Deal with Russia.

The E.C. has previously expressed its concerns over the deal as no public tender was issued for the expansion project at Paks. Located about 100 kilometers (km) south of Budapest, Paks is Hungary's only nuclear power plant, and uses four VVER-440 type reactors from Russian company AtomEnergoExport. They generate 2,000 megawatts (MW) annually and supplied just over half of Hungary's total electricity demand in 2013.

In recent weeks Russian President Vladimir Putin visited Hungary and confirmed that the €10 billion financial package was still in place. Hungary's Prime Minister Viktor Orbán has been the main driving force behind the Paks project. Speaking to Russian newspaper Kommersant, Orbán said: "If we implement everything the way we have planned, we shall have struck one of the best deals in the history of Hungary. We only have to keep firmly to the agreement. We Hungarians are innovative, and always come up with new and better ideas; it is not easy to stay on the chosen path. But if we are disciplined, we shall succeed."

There is opposition to the project from rival political parties which claim that the country is already too reliant on Russia. Hungary gets 80% of its oil and natural gas from Russia.

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