Paks without Rosatom? Hungary reconsiders key nuclear project

Hungary is considering whether Russia’s Rosatom should remain the lead contractor for the expansion of the Paks nuclear power plant. The government is reviewing the project and sounding out other companies’ interest, two sources told Reuters. The former government of Prime Minister Viktor Orbán awarded the exceptionally costly and politically sensitive project to Rosatom in 2014 without a tender.

The expansion of the Paks plant is Rosatom’s most significant nuclear project in the European Union. In May 2022, Finland terminated its contract with the Russian state-owned company. The two sides have been engaged in a legal dispute ever since.

Prime Minister Péter Magyar’s government, following his landslide victory in the parliamentary election in April, is expected to make a final decision on the Paks expansion late this year or early next year, Reuters reports. Under Orbán, Hungary opposed any sanctions on Russia’s nuclear energy sector.

The cost of completing the Paks plant was initially estimated at the equivalent of CZK 303 billion. Since work began in February, costs have already exceeded the equivalent of CZK 48 billion.

Rosatom told the agency that it is continuing work on the project in line with the schedule agreed with the customer. “We have received no formal notification from the customer of any intention to terminate the contract, nor do we see any legally grounded reasons for such a decision,” a Rosatom spokesperson wrote in an email in response to a Reuters inquiry.

Under normal circumstances, the Paks nuclear power plant covers around half of Hungary’s electricity consumption. During the summer, however, its total output fell below 25 percent of its usual capacity. Drought in August then led to the near-total shutdown of the plant’s existing reactors.

Rosatom also took part in the tender for the completion of the Dukovany nuclear power plant. It was definitively excluded in April 2021 after Russian intelligence services were found to have been involved in the explosion at an ammunition depot in Vrbětice.