Court ruling forces Hungarian government to declassify Paks upgrade agreements

By bne IntelliNews February 11, 2019

The Hungarian government and Russia’s state atomic company Rosatom have to release the public agreements on the upgrade of the Paks nuclear plant, a Budapest appeal court ruled on February 8.

The lawsuit was filed by opposition MEP Benedek Javor of the Dialogue party, who has been fighting for two years to have the documents on Hungary’s largest investment ever declassified. 

Javor sought information on the technological, financial and legal aspects of the project. Most of the documents had already been unclassified, except for one very important detail, which is whether Hungary would have to pay any compensation to Rosatom in case the nuclear plant is not built.

The government said the disclosure would lead to the release of sensitive business information. 

The opposition MEP hailed the decision as a great victory for Hungarian citizens' access to public information. “Hungarians came one step closer to finding out details of the 2014 agreement,” he wrote on Facebook.

Javor said he had doubts whether the government and Rosatom would eventually disclose the requested documents and augured an appeal with the Kuria, Hungary's supreme court.

Rosatom is the general contractor for the construction of another two blocks at the Paks plant, adding 2,400 Mw capacity to Hungary's sole source of commercial nuclear power, which accounts for 40% of electricity production.

Russia is financing €10bn of the €12.5bn project, which was supposed to start production in 2025-2026, but the deadline will certainly be missed. Rosatom still has to obtain its final construction license as safety issues had not been addressed yet.

The minister in charge of the project, Janos Suli, confirmed that the investment is in a two-year delay, but he blamed the prolonged probe by the European Commission. Hungarian officials tend to point the finger at the EC, but lengthy examinations by local authorities concerning safety also contributed to missing deadlines.

As this has become inevitable, the cabinet began talks on rescheduling the Russian loan, it was confirmed last month. Based on the Hungarian-Russian intergovernmental agreement signed in 2014, Budapest will have to start repayment from 2026, the date set for the new blocks to be operational. Hungary wants to avoid paying back the loans before the new blocks go into operation. 

The government claims the new blocks will provide cheap and secure electricity for decades to come. Two of the four existing blocks at Paks will be phased out in the 2030s as well as other ageing power plants. Without added capacities, the country would face serious supply problems in ten years, the government commissioner of the project said.

Critics contest the validity of feasibility studies on the possible rate of returns of the project based on the government’s projections for future electricity prices.

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