World News

EU drops part of reservation to Hungary's Paks nuclear project

A general view of the Paks nuclear power plant reactor unit number four building in Paks, 120 km (75 miles) east of Budapest, March 21, 2011. REUTERS/Laszlo Balogh

BRUSSELS (Reuters) - The European Commission has ended proceedings against Hungary over the award of a contract to Russia’s Rosatom to expand the Paks nuclear power plant, although it is still investigating the country’s funding for the project.

The Commission said in a filing that its infringement proceedings had closed on Nov. 17. EU rules allow public procurement without call for competition if the contract can only reasonably be given to one company.

Hungary has said that no supplier other than Rosatom would have met the government’s demand of keeping the plant in Hungarian state ownership permanently.

Hungary plans to build two Russian VVER 1200 reactors for a total budget of 12.5 billion euros ($13.2 billion), of which 80 percent will be financed by Russia and 20 percent by Hungary.

The project, fully owned by the Hungarian state, plans to start building the reactors in 2018 and aims to complete the first one in 2025, and the second in 2026.

The Commission is still investigating Hungarian funding for the plan. It has said it was concerned that the Hungarian investment might not be compatible with market pricing and opened an in-depth investigation into the business case for the construction, operation and decommissioning of the two reactors.

($1 = 0.9439 euros)

Reporting By Philip Blenkinsop; editing by Robert-Jan Bartunek