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Czech Nuclear Expansion Tender Hits New Setback

Czech Nuclear Expansion Tender Hits New Setback
dj
Τρι, 22 Οκτωβρίου 2013 - 19:02
A Czech court Tuesday issued an injunction preventing utility CEZ AS (BAACEZ.PR) from closing a contract in its ongoing tender for a supplier of two nuclear reactors at its Temelin power plant after it was challenged by a bidder that was cast out of the competition.
A Czech court Tuesday issued an injunction preventing utility CEZ AS (BAACEZ.PR) from closing a contract in its ongoing tender for a supplier of two nuclear reactors at its Temelin power plant after it was challenged by a bidder that was cast out of the competition.

CEZ last year disqualified France 's Areva SA (AREVA.FR) from the tender after it found technical flaws with its binding bid. The French company is challenging the decision in various Czech courts.

Court spokeswoman Miroslava Sedlackova said CEZ can select it's preferred candidate for the $10 billion tender, but it won't be allowed to sign a contract. Ms. Sedlackova was not able to say what steps would follow if and when the 70% Czech state-owned utility eventually chooses a supplier.

Representatives from both CEZ and Areva were not immediately available to comment on the decision.

CEZ is currently reviewing binding bids from the two remaining bidders, Westinghouse Electric Co., a unit of Japan 's Toshiba Corp. (6502.TO), and Russian state-owned Rosatom. This is the only active tender for new nuclear capacity in Europe .

The court decision is similar to the Czech anti-monopoly office ruling of November 2012 which allowed CEZ to move forward on the tender but prohibited it from signing a binding contract until all Areva claims have been resolved.

CEZ had hoped to have chosen a winner by today's date, but the company has repeatedly pushed a decision further into the future amid a raft of uncertainties. The company recently said that it wants to may make a decision by 2015, but it has refused to commit to any firm timeline.

The tender was drafted when baseload, wholesale electricity prices were at a high of around 90 euros ($123.1) per megawatt hour.

But since the euro-zone debt crisis and the Czech Republic's own recession, power prices have fallen by more than 50%, demand for electricity has slackened and Czech hopes that the nuclear power plant's expansion would make economic sense are fading, according to previous statements from both CEZ and Czech government officials.

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