“Exceptionally important contracts which had taken considerable effort during the last five months were signed”, said Attila Aszodi, Hungarian government commissioner for the project. He emphasized that the power units will be the property of the Hungarian state, while the total cost of investments would by no means exceed EUR 12,5 billion. According to Mr Aszodi the construction will start in 2018.
Example of professionalism
The signing of the contract for the only Hungarian power plant expansion is a good example of the Russian Corporation’s successful work in the foreign market, in spite of anti-Russian sanctions of Europe and the USA. The units’ construction projects makes Russia and Hungary partners in the power energy sphere for the next few decades. ROSATOM’s team conducted some serious work and in January 2014 an intergovernmental agreement on cooperation in the sphere of peaceful atom, suggesting the construction of new facilities, was signed.
As Leos Tomichek, Rusatom Overseas (ROSATOM’s promoter abroad) Executive Vice-President, told us, the preparation of the contracts started as early as this spring. Hungarian representative delegation visited Saint-Petersburg in order to get acquainted with the Leningrad NPP-2 reference project. The intense working level negotiations, concerning the contents of the contract, started being conducted in May 2014, while by October everything was almost ready.
“We really appreciate the work of both Russian and Hungarian parties, whose professionalism and dedication allowed working over and coordinating the texts of all three contracts in such a short period of time, – noted Mr Tomichek. – Hungarians have been demanding partners, taking into consideration their long-term interest. Signing the set of contracts on the Paks NPP units 5 and 6 is another acknowledgment of ROSATOM’s possessing of modern technologies with high economic parameters and fully integrated offer, which satisfies all possible needs of a client. The Paks NPP-2 construction is planned to be started in January 2015. ROSATOM will work on a turnkey basis, with localization volume of 40%. The putting into operation of the unit 5 is planned for 2024, unit 6 – in 2025.
Team work
While preparing the contract all involved companies worked as one, says Mr Tomichek proudly. NIAEP, General Contractor, was one of the most active participants. “We augmented our positive experience in cooperating with TVEL fuel company, who solved all current issues with unfailing efficiency. A big part was played by Atomproyekt, Saint-Petersburg engineering company – the Paks NPP second phase project designer; the company demonstrated its flexibility in making decisions, connected with the reference project innovations”, – says Mr Tomichek.
The specialists of Experimental Design Bureau Hydropress – an atomic reactor designer for Paks – demonstrated to the Hungarian client that Russian-designed plants meet all modern safety requirements. In terms of start-up and commissioning, operation and personnel training a high-quality work was shown by Atomtechenergo. Foreign colleagues were especially interested in the service maintenance and SNF management issues. Rusatom Service (Integrator of all ROSATOM’s enterprises service offers) and FSUE FCNRS (Federal Center of Nuclear and Radiation Safety) fully completed their part of documentation.
The negotiations were conducted and their general directions coordinated by Rusatom Overseas, which provided the balance of interests of all participants. “I’m thankful to all Russian companies’ top management for providing all-profile specialists for our common goal, in spite of tight schedule and a big amount of foreign orders”- Mr Tomichek summarized.
Giving the floor to experts
According the Dmitry Abzalov, a leading expert at the Center for Current Politics of Russia, the project’s economic benefit will be almost immediate. “It’s a complex project requiring a serious occupancy – both of human and material resources. It’s a good order for local metallurgists, construction organizations. For the Russian party it will be so too, since the project involves Russian power plant engineering industry and strengthens the position of Moscow in the market of Eastern Europe.
Today’s economic reality, as says Mr Abzalov, suggests that the governments take into consideration national interests more and more, including the issue of population’s employment. “Freezing of the long-suffering Belene NPP project in Bulgaria showed that the economic results for the country were negative. EU didn’t offer any alternative solution, financing is practically cut, the population’s employment decreased, energy security is down”- Mr Abzalov believes. According to his observation, the countries start to be more practical in joint projects, not politicizing them, focusing on long-term partnership and cooperation.
Alexander Ignatiuk, head of Energocapital investment company, believes that economic efficiency of the projects like Hanhikivi NPP-1 and Paks expansion prevail over EU’s political reasons for applying sanctions against Russia. “Even under conditions of expansive growth of political tension and actual financial embargo of Russia, Rosatom’s foreign stock of orders keeps growing’- he says. The latest example, except Paks, is the Hanhikivi NPP-1 construction based on Russian technology, supported by the Finnish Parliament.
“Commonsense, pragmatism and, what is most important, striving to provide the country’s economy with cheap and safe energy appeared to prevail in Hungary, not letting them refuse the project. Russia follows its contract obligations through, which means that the project will be completed on schedule”, – Dmitry Baranov, a leading expert of Finam-Management Company, believes. The expansion of the Paks NPP will strengthen Hungary’s export potential in European power market.
The cooperation between Russia and Hungary in nuclear sphere started back in 1966, when the corresponding agreement was signed. The finishing of the plant’s units will be a good support for developing Rosatom’s machine-building asset in Hungary – the Ganz company.
The Prime Minister of Hungary, Victor Orban, once addressed John Lukas, a well-known opponent of the Paks NPP finishing, saying, that the future of Europe is western identity and eastern energy. Russia combines those two things. This is its strong point which allows Rosatom expand its foreign stock of order year by year.
