Bulgaria utility NEK loses arbitration lawsuit with Belene nuclear power plant consultant

Written by on September 17, 2018 in Bulgaria - Comments Off on Bulgaria utility NEK loses arbitration lawsuit with Belene nuclear power plant consultant

Bulgaria’s electric utility NEK lost an arbitration lawsuit lodged by Belene nuclear power plant consultant WorleyParsons, which was awarded 31.6 million euro in damages, Bulgarian National Radio (BNR) reported on September 17.

NEK executive director Petar Iliev told BNR that there was no doubt that NEK would lose the case, but said that litigation resulted in WorleyParsons being awarded less than the 54.4 million euro that the consultant asked for.

Iliev, who described the case as a “skeleton that fell from the closet”, said that the outcome was foreordained because the contract with WorleyParsons for engineering consulting services on Belene did not contain a clause that would automatically end the contract in case Bulgaria decided to shelve construction of the nuclear power plant, as it did in 2012.

Iliev said that the situation was unpleasant, but declined to speculate why his predecessors at the helm of the utility did not insert such a clause into the contract.

The decision to stop the Belene nuclear power plant was taken under the first government of Prime Minister Boiko Borissov, amid concerns regarding the spiralling costs of construction and disagreements between NEK and the contractor, Russia’s Atomstroyexport, on the cost escalator clauses.

Prior to Bulgaria unilaterally exiting the contract – in 2013, under the socialist-backed government of Plamen Oresharski – Bulgaria paid WorleyParsons a total of 265.9 million euro for consulting and engineering services.

Despite never signing a final contract for Belene, Bulgaria ordered the necessary equipment and, in 2016, lost the arbitration lawsuit lodged by Atomstroyexport and paid 601.6 million euro to the Russian company.

As a result of the litigation with WorleyParsons, Bulgaria was unable to use the company’s services in full in the arbitration with Atomstroyexport, Iliev said.

After paying the damages and taking ownership of the equipment made by Atomstroyexport, Bulgaria has attempted to find a buyer for the two 1000MW reactors, but has found no interested parties.

As a result, the Cabinet asked and received a Parliament mandate to hold talks with potential investors in the Belene project, but stopped short of unfreezing the project altogether. The Cabinet was given a deadline until October 21 2018 to prepare an international tender for a strategic investor in the project.

(Belene nuclear plant site, screengrab from Bulgarian National Television)

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