Ceska Pozice

Rosatom promises up to Kč 120 billion to Czech firms if awarded nuclear tender

Head of Russian nuclear enterprise to sign 12 cooperation agreements with Czech firm; promises up to Kč 120 billion in Temelín contracts.

Tom Jones 28.10.2011

Jaderná elektrárna Temelín. foto: © ILUSTRAČeská pozice

Jaderná elektrárna Temelín.

The head of Russian state nuclear enterprise Rosatom, Sergei Kirienko, put the onus on the positive in Prague on Monday as it positions itself to build two new reactors at Czech nuclear plant Temelín. If the tender is decided primarily according to technological and economic criteria then the consortium headed by Rosatom has the best credentials to win, said the former Russian prime minister, but if its on geopolitical grounds, then it will lose.

With the Czech state-controlled power company ČEZ  due to issue the documentation for the tender to build a third and fourth reactor block at the Temelín plant in South Bohemia at the end of October, the three entities which have registered to bid for the contract — Areva of France, the US firm Westinghouse, and the MIR 1200 consortium comprising Atomstroyexport, and nuclear engineering firms Gidropress of Russian and JS Škoda of the Czech Republic — are stepping up public relations campaigns in the Czech Republic to support their bids. Kirienko’s visit to Prague is in itself a strong signal of the importance the Russian government is placing on the Temelín tender.    

Gidropress and Atomstroyexport are both controlled by Rosatom, while JS Škoda is owned by the Russian machine engineering firm OMZ, which in turn is controlled by Gazprom Bank of Russian state-controlled gas giant Gazprom. Rosatom insists the MIR 1200 is a Russian-Czech consortium.

Boost for 300 Czech firms

At an informal meeting with journalists in Prague on Monday, Sergei Kirienko said he will sign agreements of cooperation with 12 Kirienko was keen to stress that there are opportunities for cooperation with the Russian nuclear sector for some 300 Czech firms Czech companies during his visit to the Czech Republic on which he is accompanied by his deputy, Kirill Komarov. He revealed the largest agreement will be signed with machine engineering firm Vítkovice Holding, though he declined to divulge any details.

Spokeswoman for Vítkovice Holding, Eva Kijonková told Czech Position later on Monday that the she had no news to share about an agreement with Rosatom or its subsidiaries.   

Kirienko was keen to stress that there are opportunities for cooperation with the Russian nuclear sector for all of the 300 or so Czech companies which are due to attend the Atomex conference in Prague on October 25 and 26, which he and Komarov will address on Tuesday.

During their two-day visit to the Czech Republic, Kirienko and Komarov are also meeting with Czech Minister of Industry and Trade, Martin Kocourek (Civic Democrats – ODS), on Monday, and Prime Minister, Petr Nečas (ODS) on Tuesday.

The value of the contract to build two new reactor blocks at the Temelín power plant is estimated at a minimum of Kč 200 billion.

Banking on pragmatics, not politics

Czech PM Nečas is also likely to be courted about Temelín when he begins an official visit to the US on Wednesday this week with the and the tender expected to be at the top of the agenda at his planned meeting with US President Barak Obama. When asked how Russia could respond to such high caliber political lobbying, Kirienko said that if geopolitical allegiances are to be the deciding factor in selecting the tender winner, the Russian-led MIR 1200 consortium will lose. “There’s no doubt about that: the US is a more Kirienko claims the security credentials of Gidropress’ new third generation VVER 1200 reactor are superior important geopolitical partner for the Czech Republic.”  

The head of the Russian nuclear sector said, however, that in negotiations with Czech representatives, including the Czech government’s special envoy for the Temelín tender, Václav Bartuška, he had “no feeling of bias” nor that anything had already been agreed in relation to the massive nuclear contract.   

Kirienko put the onus on the safety, technology and jobs the Russian-led consortia could offer the Czechs. “However, we believe we can win on the pragmatic level,” he said listing key factors he believes where the MIR 1200 offer will have the advantage. He claims the security credentials of Gidropress’ new third generation VVER 1200 (Water-Water Energetic Reactor) are superior to Westinghouse’s AP1000, not least because US’ Nuclear Regulatory Commission has yet to approve the construction and operation of the reactor on US soil, whereas the first VVER 1200 — being built at the Leningradskaya II plant near Saint Petersburg — is scheduled to go online in Russia in 2014.

Further on the safety issue, Gidopress claims the new VVER 1200 can withstand the impact of a plane weighing up to 400 tons and the reactor fully complies with the tightened safety recommendations drafted by the International Atomic Energy Association (IAEA) in response to the accident at the Fukushima plant in Japan. 

Legacy of cooperation      

A central, if not pivotal, argument the Russian-led consortium will present in their bid is a high degree of localization of the project.  Kirienko said up to 70 percent of the work on the Temelín expansion would go to Czech firms, compared to a maximum of 30 percent which he says Areva or Westinghouse could offerKirienko said Monday that up to 70 percent of the work on the Temelín expansion would go to Czech firms, compared to a maximum of 30 percent which he says Areva or Westinghouse could offer: “Why only 30 percent? It’s not because they are greedy and wouldn’t want to outsource more. …It’s because they simply can’t; there’s not the local know-how.” Czech companies as a result could win around Kč 100- 120 billion in orders, he added.

Kirienko also said he was confident that Czech industry could play a crucial role in support of the Russian-led bid because, he claims, they will see that they would draw huge benefits.

The experience of Russian and Czech cooperation on the oldest Czech nuclear plant, Dukovany, and later on the first two blocks of the Temelín plant resulted in a highly valuable Czech – Russian knowledge transfer and cooperation in the nuclear energy sphere which would require probably at least a decade to achieve with a new nuclear partner, Kirienko added.

When asked by Czech Position about the Czech Ministry of Industry and Trade government’s draft energy strategy for the next 50 years leaked to the press in the summer — which among others proposes expanding uranium mining and establishing a full nuclear cycle including uranium enrichment and disposal in deep repositories — Kirienko said the strategy is “altogether reasonable” and said the state enterprise had already proposed potential cooperation to ČEZ and the Czech government in the areas of uranium enrichment and disposal. It would make economic sense for the Russian nuclear sector to build an enrichment facility in the Central European region if and when there are 10 or more VVER-type reactors in operation in the CEE region, he said.

Kirienko added that as a result of his enterprise's acquisition program he expects Rosatom to consolidate the largest uranium reserves in the world by 2015 and consequently become the global leader in uranium enrichment.  

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