Polish nuclear plans threatened with further delay

By bne IntelliNews January 8, 2015

Jan Cienski in Warsaw -

 

Poland’s increasingly tense relationship with Russia is casting a shadow over the country’s sluggish attempts to build its first nuclear power plant, apparently affecting a recent decision to break ties with an Australian subcontractor, which now threatens to delay the project even further.

Late last year, PGE EJ1, a subsidiary of the government owned PGE utility, which is responsible for the nuclear power plant project, cancelled a contract according to which Australia’s WorleyParsons would conduct an environmental survey on the best location for the plant. The utility broke the 311m zlotys (€74m) contract, saying it was “due to WorleyParsons’ failure to meet contractual obligations and a delay in execution of works performed under the contract".

However, the Rzeczpospolita daily reports this week that the reasons were also linked to the government’s growing concerns about the Australian firm’s ties to the much larger Russian market as well as to a controversial project to build Bulgaria’s Belene nuclear power plant. Worries about the Bulgarian project were the subject of US cables revealed by Wikileaks, where US officials noted the “pernicious corruption” in the Bulgarian power sector and especially the close ties between WorleyParsons and Bogomil Manchev, whose power in the sector was “rumored to be all-encompassing”.

“Manchev and [one of his many subsidiaries] Risk have a close working relationship with the Australian-US firm WorleyParsons,” noted Wikileaks.

Bogomil Manchev is a high-profile energy consultant facing fraud and mismanagement charges for the role his Risk Engineering company played in the stalled Belene nuclear power plant project. He has denied wrongdoing.

Rzeczpospolita reports that Polish authorities were warned by Polish intelligence about the risks of going with WorleyParsons, but that those fears were rejected as the company offered the lowest cost bid to complete the work. In a response to the newspaper, the Australian firm called PGE’s management unprofessional.  

PGE is now proposing to complete the environmental study on its own, and the two sides are fighting over what happens to the contracted 311m zlotys.

The conflict is likely to further delay the 60bn zloty nuclear project. The nuclear plant would lower Poland’s dependency on energy imports from Russia as well as reducing the country’s reliance on polluting coal – which now accounts for almost 90% of power generation – helping Poland meet its clean air targets.

The first stage of the plant – whose final location has still not been determined – is due to come online at the end of 2024. However, with all the work done by WorleyParsons now in question, the fear is that the environmental assessment will have to be restarted, potentially adding two years to project completion.

Poland has been planning a nuclear power plant since the 1970s, but economic chaos followed by a lack of money and growing environmental worries have left the country as one of the few ex-Soviet bloc countries without such a facility.

 

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