Hungary's Orban Meets Putin for Nuclear Talks
Hungarian Prime Minister Viktor Orban meets Russian President Vladimir Putin on Tuesday for talks touching on a potentially huge contract for Russia to boost the EU nation's only nuclear power plant.
The Kremlin said in a statement that the two close trade and energy partners were holding "substantive discussions" on building up the capacity of Hungary's Paks facility.
Moscow's Gazeta.ru news site cited an unidentified source as saying the contract to more than double the plant's existing capacity of about 2,000 MW may be worth up to 10 billion euros ($13.7 billion).
The Kremlin statement said Paks was responsible for producing 40 percent of the energy consumed in the former member of the now-defunct Soviet-led Warsaw Pact.
It added that Russia supplied about 80 percent of Hungary's oil and 75 percent of its natural gas.
"The negotiations with Hungary have reached their active stage," Russia's Rosatom state atomic energy corporation chief Sergei Kiriyenko told the Interfax news agency.
Hungary's Nepszabadsag daily reported that Budapest and Moscow were likely to sign an inter-governmental agreement on the plant's expansion during Orban's visit.
Paks is run by Hungary's state-owned MVM -- a group which also imports natural gas from Russian energy giant Gazprom and would like to negotiate a price cut.
The Hungarian parliament approved a decision in 2009 to add two more reactors to the four already operating at Paks.
France's Areva and U.S. electric company Westinghouse along with Japanese and South Korean power suppliers had previously expressed interest in bidding for a contract of the Hungarian plant's expansion.
But the Nepszabadsag daily report said that Russia's Rosatom was the only potential bidder willing to offer pre-financing.
It added that total investments of 13.3 billion euros ($18.2 billion) would make it by far the biggest project assumed by Hungary since it joined the European Union in 2004.
Any deal with Russia could prove controversial for Orban because no formal bidding process for the plant's expansion has yet been launched.
European Union rules stipulate that any state project must be awarded through a bidding process.
But some experts believe Orban could try to sidestep the regulation by arguing that the Russian contract was awarded for the expansion of an existing facility and not the construction of a new plant.
"It now looks like the tender will not take place, which contravenes EU norms," the unnamed source told Gazeta.ru.
"But in this case, we are only talking about the expansion of an existing plant and not the construction of a new one," the source added.
"Based on this, we can hope that the EU leadership will not have substantial complaints about the tender's annulment."
Paks was launched by Soviet nuclear power engineers in the early 1980s and its first reactor's lifespan expires within the next 15 years.
But analysts note that the complicated process of winning the necessary licenses and environmental oversight approvals -- as well as the length of the construction itself -- means Hungary must act quickly to meet its future energy demand.
Russia is currently Hungary's most important trade partner outside the European Union.
But Hungary suffers from a big trade imbalance which favors Moscow and would like to broaden its agricultural sales to Russia to close the gap.
Source: Agence France Presse
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