EC Drops Probe of Hungary's Paks II Nuclear Project

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Hungary's controversial Paks II nuclear power project took a step closer to moving forward after the European Commission (EC) dropped an investigation into the government's procurement practices.

The EC launched a major investigation into the proposed Paks II project last year, which aims to construct two 1,200-megawatt (MW) nuclear reactors at the existing Paks nuclear power plant. At the time, Hungary awarded the 10 billion euro ($13.6 billion) Paks II contract to Russia's state-owned Rosatom Corporation (Moscow, Russia), without an open tender process. For additional information, see March 2, 2015, article - Hungary's Paks Nuclear Deal Faces European Investigation.

This week, the EC has agreed to drop this part of the investigation, agreeing that Rosatom was the only company that could cater for all of the government's stipulations for the contract. It still plans to investigate the proposed funding for Paks II.

"Hungary has sufficiently justified that the use of the so-called technical exclusivity exemption, which means that when the technical and safety requirements of the project can only be met by one company, it can be compatible with EU laws to award the contract directly," stated Lucia Caudet, European Commission spokeswoman.

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 (Moscow, Russia). Commissioned between 1982 and 1987, the reactors have a combined generating capacity of 2,000 MW and supplied just over half of Hungary's electricity in 2013. The new units 5 and 6 will use VVER-1200 reactors, also from AtomEnergoExport. Construction is slated to start in 2018.

In 2014, Industrial Info reported that the plant's construction was being financed almost entirely by a loan from the Russian government. For additional information, see July 11, 2014, article - Hungary Signs 10 billion Euro Nuclear Deal with Russia.

U.S. engineering company Westinghouse Electric Company LLC (Monroeville, Pennsylvania) has expressed its disappointment over the Commission's Paks II decision. Speaking to the Politico website, it stated: "Westinghouse spent substantial time and resources responding to Paks requests for information on technology and commercial terms in preparation for a bid phase. The sudden announcement of a sole source procedure was very surprising as we believed the Westinghouse AP1000 reactor would have been a very competitive alternative based on our discussions. Unfortunately, we were never given the opportunity to provide a bid."

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