Atomstroyexport, a Russian company, wants Bulgaria to pay 1 billion euros for the damages it claims it sustained from Sofia's decision to cancel the Belene nuclear power plant.
By Svetla Dimitrova for Southeast European Times in Sofia -- 17/09/12
A Russian company is seeking 1 billion euros in compensation over the Belene nuclear power plant project. [Reuters]
Bulgarian Prime Minister Boyko Borisov vented his anger on Thursday (September 13th) at Russian company Atomstroyexport's 1 billion euro compensation claim over the Belene nuclear power plant project, which the Balkan country cancelled earlier this year.
Speaking at a news conference in Sofia, he hoped that Russian President Vladimir Putin was not aware of Atomstroyexport's decision Tuesday to raise its claim before the International Court of Arbitration in Paris from 58 million euros initially.
"But if he knew, he will not enjoy our meeting in Bulgaria on November 9th, when we are due to sign the South Stream" gas pipeline project, Borisov said, noting only that "this project has been agreed on and construction will start."
Bulgarian President Rosen Plevneliev also noted that the focus of the upcoming talks with his Russian counterpart would be on energy issues, stressing that "true friends would never resort to mutual blackmailing."
Two Bulgarian ministers -- Simeon Djankov of finance and Delyan Dobrev of economy, energy and tourism – said they were confident that the court in Paris will reject the claim.
None of the project documents that have been made public justify Atomstroyexport's 1 billion euro demand, Ivan Ivanov, a lawmaker of the right-wing party Democrats for a Strong Bulgaria (DSB), said.
"The government said that there was an outstanding 140 million-euro bill only to be paid on that project," told SETimes.
GERB and the rightist Blue Coalition, including the DSB and the Union of Democratic Forces, have called for the creation of an interim committee to study all documents on the project. The panel would look into every detail, making sure also that there are no "secret agreements" or undisclosed commitments made by former government officials, according to Ivanov.
Atomstroyexport was contracted to build the second plant in Bulgaria in November 2006. But the ruling socialist-led three way coalition failed to sign a final engineering, procurement and construction contract on the project until July 2009, when Borisov's centre-right party GERB won the parliamentary elections and formed the new government.
Despite this, the implementation of the project began to freeze in late 2009 when German energy company RWE, the main investment partner in the venture, withdrew from it amid growing uncertainty about its future.
The most contentious issue precluding the signing of a final contract by Borisov's government was the price of the project, initially set at about 4 billion euros. Russia later said that building the plant with two reactors of 1,000 MW each would cost 6.3 billion euros, while the GERB cabinet insisted that the expenditures should not exceed 5 billion euros.
A Sofia-commissioned assessment by British multinational banking and financial services company HSBC showed earlier this year the final price to be standing already at more than 10 billion euros.
After more than a dozen addendums extending the effectiveness of the initial agreement of 2006, Bulgaria said on March 28th that it was quitting the project due to lack of a strategic investor and funds to build the Belene plant on the Danube River.
Heavily dependent on Russian energy supplies, the Balkan country has been seeking ways to diversify its supply sources and routes.
Just weeks before the launch of talks on a new agreement on gas supplies with Russia, Bulgarian authorities signed a five-year deal for oil and gas exploration at the Khan Asparouh 1-21 block in the Black Sea with French company Total, Austria's OMV and Spain's Repsol in late August.
Covering an area of 14,440 square km, the site is only 15 km from the Neptun block off the Romanian coast that could contain more than 80 billion cubic metres of gas.
"We are making a giant leap towards Bulgaria's true energy diversification in oil and gas supplies," Borisov said after signing the contract.