Bulgaria handed one billion euro bill for Belene

Written by on September 11, 2012 in Business - No comments

Russian contractor Atomstroyexport, picked to build two 1000MW nuclear reactors at Belene on the Danube River, has increased its arbitration claim against Bulgaria to one billion euro, money that, the company says, has been spent to order equipment for Belene before the Bulgarian Government decided to abandon the project in March.

Bulgaria’s state electricity utility NEK, which owns the Belene project, and Atomstroyexport, have lodged separate lawsuits against each other last year – Atomstroyexport demanding it be paid for equipment it ordered for Belene, while NEK claimed that the Russian company has failed to pay up fully for the old equipment from the Belene site, which had been left over from the communist era when Bulgaria was building its second nuclear plant with Soviet equipment.

On September 10, Atomstroyexport – the foreign operations arm of Russia’s state-owned nuclear corporation Rosatom – had increased the size of its claim lodged in the arbitration court in Paris, saying it has used its own money to order equipment for the Bulgarian plant and was never paid for it.

Although Atomstroyexport was picked in a tender in 2006 and a preliminary contract was signed in 2008, the two sides never signed a final contract. The main point of contention has been the cost escalation clauses, with Bulgaria and Russia insisting on different rates.

The initial cost of the project was set at four billion euro, but a study by HSBC, hired by the Bulgarian Cabinet to carry out the financial audit of the project and estimate its costs, put the final price tag earlier this year at more than 10 billion euro, an increase owed largely to increased costs of financing.

In March, the Government in Sofia decided to shelve the project and use the first reactor, which Atomstroyexport says is almost ready, at the site of its existing nuclear power plant at Kozloduy, further upstream from Belene on the Danube River. The Cabinet hired US firm Westinghouse last month to carry out the feasibility study.

(Bulgaria’s sole nuclear power plant at Kozloduy. Photo: uvioc/flickr.com)

Comments

comments

About the Author

The Sofia Globe - Bulgaria’s fully independent English-language news and features website, run by an all-expatriate team. Sign up to subscribe to sofiaglobe.com's daily bulletin by using the form on the homepage of our website. Please click to support our advertisers!