Bulgarian Parliament passes Belene arbitration damages bill at first reading

Written by on September 21, 2016 in Bulgaria - Comments Off on Bulgarian Parliament passes Belene arbitration damages bill at first reading

Bulgaria’s MPs passed at first reading on September 21 a bill authorising a cash injection from the state Budget to the state-owned electric utility NEK to pay the damages awarded by an international arbitration tribunal in a dispute with Russia’s Atomstroyexport.

The bill passed with 132 votes in favour, two against and six abstentions, receiving the support of most political parties in Parliament, including those of GERB, the Patriotic Front and Reformist Bloc in the ruling coalition, as well as the opposition Movement for Rights and Freedoms, Bulgarian Democratic Centre and socialist splinter ABC, Bulgarian National Radio (BNR) reported. The largest opposition party, the socialists, did not participate in the vote and the ultra-nationalists Ataka voted to abstain.

Approved at the Cabinet sitting on September 20, the bill does not stipulate an exact amount that NEK will receive, mainly because of the daily penalty clauses. After the Cabinet meeting, Energy Minister Temenouzhka Petkova said that NEK currently owed about 629 million euro, but the amount would grow past 646 million euro by the end of the year.

Atomstroyexport, a division of Russia’s nuclear corporation Rosatom, was picked to build two 1000MW nuclear reactors at Belene on the Danube River, a project that was shut down by Bulgaria in 2012. The Russian contractor filed for arbitration, asking for 1.2 billion euro in damages for equipment ordered for the nuclear power plant, which NEK never paid for, and won the court action in June.

During the debate on the House floor, socialist MPs blamed Prime Minister Boiko Borissov’s GERB for the large arbitration damages bill, given that the Belene project was shelved during Borissov’s previous administration.

The party’s MPs also said that they wanted to amend the bill to open the prospect of restarting the project – an option that the Cabinet has rejected so far, although Borissov and some GERB MPs have spoken in recent months about potentially spinning off the Belene site and the nuclear reactors into a separate company that would then be privatised.

Parliament’s budget committee is scheduled to hold a meeting on the bill on September 27 and a second reading vote could be held as early as next week. The payment, however, might not be immediate since Bulgaria would require the approval of the European Commission before the funds can be released, the Cabinet said in a media statement on September 20.

(Bulgarian Parliament photo: Clive Leviev-Sawyer)



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