Current Affairs Areva excluded from multi-billion dollar Temelín contract
The state-run power company ČEZ has excluded France’s Areva from a multi-billion dollar contract for the completion of the Temelín nuclear power plant, leaving just two contenders - Russian and US firms - in the running for the country’s biggest-ever energy deal. The news has left analysts speculating on the political and economic implications of this development.
The news that the only EU contender for the completion of the Temelín nuclear power plant was out of the running came like a bolt from the blue on Friday. ČEZ spokesman Ladislav Kríž announced the decision just hours after informing the Czech government about it.
“Areva’s bid failed to meet the tender criteria - and I am not referring to one point but many. It failed to meet several important legal and commercial requirements which could not be overlooked. We have specified the reasons case-by-case but are not in a position to publish the information until the appeals process has been concluded.”
Although ČEZ would not specify the reasons for Areva’s exclusion well-informed inside sources told the daily Mladá Fronta Dnes that the French company’s bid was so badly bungled that if the company was not excluded from the running the two rivals could easily lodge and win a complaint against the regularity of the tender. Among the failed requirements cited unofficially are Areva’s failure to set a price on the construction of the two new reactors, a clause stating that it could change the conditions of the deal under changed circumstances and failing to meet Czech laws on nuclear power in the transport of components for the reactors’ construction. “It was not one point which could be put right, but a great many” the anonymous source told the daily. ČEZ has refused to comment on speculation that it had dumped Areva – eight months after the bid was made – in connection with ongoing problems in similar deals in Finland and France. In Finland the cost of a reactor being built by Areva has unexpectedly doubled and its completion date originally scheduled for 2009 has now been tentatively postponed to 2014. The government’s special commissioner for the completion of Temelín Václav Bartuška is tight-lipped, but Industry Minister Martin Kuba said ČEZ had valid reasons for excluding the French company.
Meanwhile, Areva, the world’s largest supplier of nuclear fuel and services, responded to the news of its exclusion almost immediately saying that it would appeal the decision according to the rules stipulated in the conditions of the tender. “Areva firmly believes we have met all the tender criteria and we look forward to addressing the issues raised by ČEZ” the company said in a statement.
The news that the state owned Areva was out of the running was relayed to the French authorities by Czech Foreign Minister Karel Schwarzenberg who happened to be on a working visit to Paris at the time. It is a bad blow to the French government which was hoping that the Temelín deal would help Areva improve its flagging reputation and revive its international nuclear reactor business. Fabrice Martin–Plichta, a French journalist based in Prague says France had a lot to offer.
“This bid by Areva was the only offer made from within the EU. That was considered an advantage in meeting EU requirements. Areva had a lot to offer the Czech Republic, it was a partner EU country which said it was ready to cooperate with the Czech Republic in building nuclear reactors elsewhere in the world. This decision will upset all these plans. And there is no doubt that we are looking at a period of increased tension in Czech-French relations.”
That was all-too-evident from the long faces and fixed smiles during the Czech foreign minister’s visit to Paris last week. Mr. Schwarzenberg’s warning that the Czech Republic should not increase its dependence on Russia any further, did little to dispel the gloom of his French hosts.
Meanwhile experts say it will be a close race between the two remaining rivals –Toshiba’s US unit Westinghouse and Russia’s Atomstroyexport. Westinghouse allegedly offers superior technology, Atomstroyexport a big role for Czech firms in the construction process.