Weekly newsletter

Paks Power Plant: Orbán and Putin Discuss Plant Upgrade, as Government Ministers Speculate on Project Costs Doubling

Tom Szigeti 2017.03.08.

Yesterday, Hungarian Prime Minister Viktor Orbán spoke with Russian President Vladimir Putin about the planned Paks II nuclear upgrade project. At the same time, PMO head János Lázár expressed his view that the project might cost a total of 200 billion forint (approx. 644.5 million euro), rather the 99.7 billion forint (321.3 million euro) currently allocated in the government budget.

Both developments come on the heels of yesterday’s news that the European Commission had granted its approval to the Hungarian state’s providing a subsidy to the Paks nuclear power plant upgrade project.

According to Hungarian wire service MTI, Mr. Orbán called Mr. Putin to discuss issues surrounding the Paks II upgrade plan.

In addition, according to Russian government site kremlin.ru, the Russian President and the Hungarian PM talked about bilateral issues pertaining to the two countries, as well as about the implementation of agreements signed during Mr. Putin’s visit to Budapest at the beginning of February. International affairs were also discussed.

The Russian site added that the two leaders welcomed the European Commission’s decision, which has ““removed obstacles from adding two new blocks to Hungary’s Paks Nuclear Plant, involving Russian state company Rosatom.”

Also on Tuesday, Hungarian Economy Minister Mihály Varga told MTI that the EC’s approval of the project is great news. He added, however, that in a discussion with PMO head János Lázár, the latter said that he expects that this year’s costs for the Paks upgrade project will be around 200 billion forint (644.5 million euro).

The government has currently allocated 99.7 billion forint (321.3 million euro) for the Paks II upgrade in this year’s budget; in other words, the project may end up costing twice as much as the government originally budgeted for if Mr. Lázár’s expectations prove to be correct.

Mr. Varga said that, if this turns out to be the case, then the government will have to either tap into current budget reserves, or take out additional loans from Russia to pay for the project. The Economy Minister emphasized that the government will use domestic resources to cover the increased costs as much as possible.

The Paks upgrade project will involve the construction of two new reactors, which are set to replace the four reactors currently operating at Paks, which were constructed in the 1980s and currently account for approximately 50 percent of Hungary’s domestic electricity production.

Via MTI and Hungary Matters

Image via MTI

    [1536x1536] => Array
            [width] => 1536
            [height] => 1536
            [crop] => 

    [2048x2048] => Array
            [width] => 2048
            [height] => 2048
            [crop] =>