Hungarian parliament OKs nuclear plant deal with Russia

Hungary's parliament on Thursday gave a thumb up to a contract authorizing Russia's Rosatom to build two new reactors at the country's only nuclear power plant. The plant is located in Paks, a town about 100 kilometers south of Budapest on the Danube. The vote was carried by a sizable majority as the ruling Fidesz party has a two-thirds majority in parliament, and many MPs from the far right Jobbik party voted with it. The other opposition parties were against it, but the overall vote was still 256 to 29. An agreement on cooperation in the peaceful use of nuclear power was signed by Hungarian National Development Minister Zsuzsanna Nemeth and Rosatom chief Sergey Kiriyenko in Moscow on January 14, which included Rosatom's construction of two new reactors. The agreement calls for designing and building the new reactors, each to have a capacity of at least 1000 megawatts, designed to replace the four reactors now operating in Paks and slowly nearing the end of their service lives. Russia is granting Hungary a 10 billion euros (14 billion U.S. dollars) line of credit for the construction, with a grace period on repayment until the first of the reactors is in operation. The variable interest rate on the loan will be 3.95 percent for the first eleven years, 4.5 percent for the next phase, and 4.9 percent afterwards, said National Economy Minister Mihaly Varga. On Wednesday Varga said that the loan agreement would be signed within the next few days. The vote was taken by roll-call, and was interrupted repeatedly by members of one opposition party, LMP, which used a megaphone siren to prevent the MPs from being heard. They were eventually ejected from parliament. There have also been street demonstrations, some calling for the power plant to be shut down and others opposing the deal with Russia, made without benefit of an international bidding process or negotiations with any other prospective company. According to the Russian-Hungarian agreement, sustaining the capacity of the power plant would significantly enhance Hungary's GDP, since the new facility will be government owned. It also allows Hungary to do 40 percent of the work to build the reactors. Varga has said that 50.7 percent of the electric power produced in Hungary in 2013 came from the Paks power plant. He also said that the power produced at Paks was the cheapest source of electricity. Opponents, however, argue that Paks is completely amortized at present, but with the loan to repay, the electric power will become much more expensive. Prime Minister Viktor Orban said earlier that Paks would not be expected to provide the funding to repay the loan, so the price of electricity would not be affected. Opponents however, point out that the taxpayer would still be saddled with the bill, whether as electricity or taxes. The MSZP socialist party and the E-PM party oppose the idea of borrowing this huge amount of money.