The European Commission has launched an infringement procedure against Hungary for failing to comply with European Union public procurement rules in a planned upgrade of the Paks nuclear power plant. According to Minister Overseeing the Prime Minister’s Office János Lázár, Hungary is ready to hold talks with Brussels over the EUR 12 billion project but will take the issue to court if necessary.
“The Hungarian government has directly awarded the construction of two new reactors and the refurbishment of two additional reactors of the Paks II nuclear power plant without a transparent procedure,” the Commission says on its website. “The Commission considers that the direct award… does not comply with European Union legislation on public procurement…[that] consolidate the basic principles of the Treaty on the Functioning of the European Union of transparency, non-discrimination, and equal treatment.”
The EC asked Hungary for information on the matter in a “letter of formal notice”, the first stage of an infringement procedure. The Commission said it had already had exchanges with the Hungarian authorities and thoroughly assessed the terms of the award, but still has “concerns regarding the compatibility of the project with EU public procurement rules”.
At a regular press briefing in Brussels, Lucia Caudet, the EC’s internal market spokesperson, reiterated the content of the EC’s announcement. “There’s not much more I can say for now,” she added. Pressed to comment on a possible suspension of the Paks project, Caudet said the EC was ready to assist the Hungarian authorities to take the appropriate steps to bring the situation in line with EU law. “The exchanges between the Commission and the national authorities in the context of infringement procedures are confidential,” she noted.
Lázár said Brussels does not have the right to prohibit commercial agreements with non-EU countries such as Russia, China or Arab nations. Russian energy giant Rosatom has been given the main contract.
He said Hungary is ready to hold co-ordination talks with Brussels in the next two months but is ready to go to court if needed.
Minister of Foreign Affairs and Trade Péter Szijjártó said Hungary does not need to renegotiate its intergovernmental agreement with Russia on the Paks expansion. Asked by the daily Népszabadság to comment on remarks in May by Russian President Vladimir Putin that any move by the EU to block Hungary’s contract with Rosatom would be disadvantageous for bilateral relations, Szijjártó said no such warning had been made at a recent meeting with the Russian deputy foreign minister.
Hungary remains committed to the expansion because its energy security is in large part based on Paks, he said, adding that the investment would be completed.
The issue became even more complicated on Monday when the European Commission announced that it had launched an in-depth investigation into Hungary’s plan to provide financing for the Paks upgrade.
“The Commission will in particular assess whether a private investor would have financed the project on similar terms or whether Hungary’s investment constitutes state aid,” the EC said on its website. “If the project is found to involve state aid, the Commission will investigate whether as planned it would lead to distortions of competition in particular on the Hungarian energy market.”
Margrethe Vestager, Commissioner in charge of competition policy, said: “Given the size and importance of the Paks project, the Commission has to carefully assess whether Hungary’s investment is indeed on market terms or whether it involves state aid. This requires a complex analysis. I think it is important that stakeholders can also submit their views.”
Opposition parties again called for a halt to the Paks project. Politics Can Be Different (LMP) demanded that the government stop all preparations until the related European Union procedures are concluded. LMP co-chair Bernadett Szél said preparations cost hundreds of billions of forints and if the government fails to suspend them, LMP will consider filing a criminal report for budget fraud and damage caused by administrative authorities.
Szél noted that this year’s state budget allocated 28 billion forints and next year’s one 113 billion forints for the project. The government should not risk taxpayers’ money for a project that might not materialise, she said.
Democratic Coalition (DK) deputy leader Csaba Molnár said the Paks project fails to meet EU regulations in three areas and two official procedures against it are already under way, with a third one, on the classification of environmental information, being prepared. He called on the government to “make do with two slaps in the face and not run into a third one”.
Molnár said the project will push future Hungarian generations into indebtedness, it is non-transparent, poses corruption risks and only serves the interests of ruling Fidesz and its Russian business partners.
Együtt (Together) demanded that no more money should be spent on Paks expansion and the government should make public all contracts signed so far. The resources that Hungary has allocated for the investment should instead be spent on green energy and energy-saving projects, a party statement added.
The Prime Minister’s Office said the Hungarian government’s firm position is that there is no state aid in the Paks 2 nuclear upgrade project. “The government is committed to keeping the Paks nuclear plant in state ownership as this is the way Hungary’s energy security can be guaranteed and cheap electricity ensured for households and businesses,” the office said.
Victor Orban had it correct, when he said, ‘where there’s meat, there are flies’. What bothers most of us, is how the ‘DK’ and ‘LMP’ parties are always on the attack and ready to convict the ‘FIDESZ’ party. Even in this case where the tax payer ‘state’ has a lot to loose if wrongly convicted. Yet these two opposing parties say their looking after the ‘tax payers’ or ‘states’ interest. I once had a friend who stood next to me and barked at the bullies and then stood back when the bullies tried to harm me. I kicked the crap out the bullies, and the dog beside me ceased to be my friend from that time once, my choice.