State may delay nuclear tender

The completion of two cooling units at the nuclear power plant Temelín, a project that could be worth up to 500 billion Kč ($27.9 million) and one of the largest energy tenders in the world, could be delayed anywhere between one and several years, according to various government officials, and their reasons for the delay are as diverse as their estimates.

Most recently, Energy Ambassador Václav Bartuška told several news outlets that ČEZ will choose a supplier in 2013, one year after the energy company was supposed to choose a winning bid. Bartuška did not specify what monetary effect the delay would have on the total project cost, or whether delaying the tender process would delay the actual construction, expected to be finished in 2010. The delay comes at the request of the three bidders, Bartuška said, and so far their proposals haven't been up to ČEZ's requirements.

"It's possible that in 2013 ČEZ decides not to pick any of the bidders," he told Bloomberg Oct. 18. "It's not written in stone that that there has to be a winner in 2013."

The Industry and Trade Ministry, however, blames what they believe could be a delay of several years on rising energy costs, in addition to suppliers' requests, the minister announced Oct. 13 at a press conference.

"The entire strategy according to which Temelín was built has changed somewhat because power consumption is developing differently [than earlier expected] and so are power prices," said Industry and Trade Minister Martin Kocourek. "At the same time, suppliers have asked for some extra time to submit their ideas in the framework of the proceedings. So in this respect, there could be some delay... It could be years."

All parties expect ČEZ to delay presenting the documentation bidders need to prepare their proposals and offers. Originally, those documents were expected to be presented in November of this year. Now, Bartuška and the Industry and Trade Ministry both expect it to be postponed until next year.

The final word on such a delay was to be announced Oct. 19, according to Prime Minister Petr Nečas.

As of press time, however, no such decision had been made, or even discussed, by the state-owned utility company ČEZ, which oversees the project.

"We expect [a decision] in one month's time," company spokeswoman Eva Nováková told The Prague Post Oct. 18. "The decision has to be made by the supervisory board of the company. ? This has not happened so far. There was not even any discussion about it at last week's meeting of the supervisory board."

Nováková added that the possibility came from discussions and information that came as a result of conversations with the three bidders that indicated the time frame was too tight. The company's priority, she said, was to avoid construction delays once the project had started, and to that end, ensure the preparatory phases were adequate.

"This pre-consideration is not based on any finance issues or demand estimation changes after 2020," she added.

Kerry Hanahan, director of project development in the Czech Republic for Westinghouse, said his company had not asked for a delay in the tender, however.

"Westinghouse has not been officially informed of any delays by ČEZ, nor has Westinghouse requested a delay," Hanahan said.

A representative of Areva was not available for comment as of press time.

ČEZ has sent a letter to all three bidders - France's Areva, U.S. company Westinghouse and the Russian-Czech consortium of Škoda JS, Atomstrojexport and Gidropress - that explains the utility giant deems it necessary to have additional consultation meetings that could prolong the competition dialogue.

The company's shares fell for the fifth consecutive day Oct. 18, and the company's stock is down 14 percent on the year, an 18-month low. The recent drop is due to recent news that the government will try to halt electricity price growth next year by charging for carbon credits. The company initiated a savings program in 2009 and reduced its investments plan by 100 billion Kč, much of that coming from foreign investments.

"We have already announced that we would concentrate on the domestic investment and consolidate our existing positions abroad to ensure financing capacity for Temelín project," Nováková said.

Claire Compton can be reached at
ccompton@praguepost.com