Hungary’s Paks II project clears procurement hurdle

22 November 2016

The European Commission has cleared Hungary's award of a contract to Russia's Rosatom to build two new units at the Paks nuclear power plant.

The European Commission has been examining until recently two matters related to the Paks II - procurement and whether funding of the project amounts to state aid. On 17 November it closed the infringement procedure it had launched against Hungary over public procurement rules in connection with the capacity maintenance of the Paks nuclear power plant. It is still investigating whether there is state aid in the project.

Paks currently comprises four Russian-supplied VVER-440 pressurized water reactors, which started up between 1982 and 1987. An inter-governmental agreement signed in early 2014 would see Russian enterprises and their international sub-contractors supply two VVER-1200 reactors at Paks, as well as a Russian state loan of up to €10.0 billion ($11.2 billion) to finance 80% of the project.

Attila Aszódi, the government commissioner responsible for Paks II, told World Nuclear News that the DG GROW infringement procedure on procurement had now been closed. "We are still waiting for the DG COMP decision on possible state aid, but we know this will be released within the next two weeks,” he said. DG GROW is the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, while DG COMP is the Directorate-General for Competition.

In ending its investigation into procurement, DG GROW has concluded the project does not infringe EU rules that allow public procurement without competition if the contract can only reasonably be given to one company.

"Hungary has sufficiently justified that the use of the so-called technical exclusivity exemption, which means that when the technical and safety requirements of the project can only be met by one company, it can be compatible with EU laws to award the contract directly," European Commission spokeswoman Lucia Caudet told reporters on 18 November.

Aszódi confirmed comments made by Janos Lazar, minister of the Hungarian prime minister’s office, at his weekly press briefing in Budapest that it was realistic to expect construction of the two new VVER-1200 units at the Paks site to start in 2017-2018. Lazar added that Hungary had undertaken to apply EU procurement norms on up to 55% of the investment value of the project.

Aszódi told WNN: "This is an extremely important step in the realization of the project. While waiting for the EC's decision, the licensing of the project is going on and experts are currently concentrating on the site licensing of the new units."

Project company MVM Paks II received an environmental licence in late September and last month submitted a site licence application for the two new units.

The first unit is to completed in 2025 and the second in 2026.

Researched and written
by World Nuclear News