Bulgarian PM, Russian president discuss Belene nuclear plant in phone call

Written by on February 19, 2013 in Bulgaria, Business, News - No comments

Bulgarian Prime Minister Boiko Borissov said on February 19 that the main topic of discussion during a phone call with Russia president Vladimir Putin earlier in the day had been the future of the Belene nuclear power plant.

The Kremlin said the conversation focused on issues of Bulgarian-Russian co-operation, including in the energy sector, as well as plans for “contacts at the highest level”, but there had been no statement from the Bulgarian Cabinet’s media office prior to Borissov’s scheduled news conference on the issue of measures meant to address concerns raised by protesters against high electricity bills (reported by The Sofia Globe in detail here).

Asked by a reporter, Borissov said that he routinely talked to Putin, as well as other world leaders. He said that he’s had a standing offer from Putin, as well as Russian prime minister Dmitry Medvedev, to visit Moscow to discuss the future of the nuclear power plant project at Belene, which the Borissov Cabinet shelved in March 2012.

The invitation is “to talk how we can avoid litigation and find a solution – either we sell the reactors together, or, as we suggested, building a seventh unit at Kozloduy nuclear power plant,” Borissov said.

“In the end, we have to find a solution instead of suing for billions of euro in Paris and Geneva. That was our discussion,” he said.

Russian contractor Atomstroyexport, picked to build two 1000MW nuclear reactors at Belene on the Danube River, increased its arbitration claim against Bulgaria to one billion euro in September 2012, claiming that it was the money it spent to order equipment for Belene before the Bulgarian Government decided to abandon the project.

Bulgaria’s state electricity utility NEK, which owns the Belene project, and Atomstroyexport, had lodged separate lawsuits against each other in 2011 – 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.

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 for the construction of the nuclear power plant. 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.

Bulgaria’s largest opposition party, the socialists, who were the senior partners in a tripartite coalition that signed the Belene contract, launched a petition for a referendum on Belene. The plebiscite, held last month showed – depending on one’s point of view – either strong support for Belene’s construction or complete disinterest in the issue, given the low turnout. The issue is now scheduled to go back to Parliament, where Borissov’s ruling party, GERB, is expected to defeat any motion to resurrect the project.

(Vladimir Putin, then prime minister of Russia, pictured here with Borissov, right, during his last visit to Sofia in November 2010. Photo: government.bg)

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Alex Bivol is the news editor of The Sofia Globe.