Банкеръ Weekly



Just a few days after the letter of the European Commission (EC), warning about the five problematic spheres in which Bulgaria should show progress till the autumn, Minister of Economy and Energy Roumen Ovcharov sacked Ivan Ivanov, Executive Director of the Kozlodoui N-plant. He will be replaced by his former deputy Ivan Genov.
The issue of nuclear safety is also included in the letter, signed by the EU Enlargement Commissioner Olli Rehn and his colleague, Energy Commissioner Andris Piebalgs. Mr. Ovcharov explained that the replacements in the power station's managerial team are mostly because of the idle talk about saving the N-plant's units 3 and 4, due to be decommissioned on December 31, 2006. The other reason is Mr. Ivanov's failure to establish the necessary relations with the EC and the European Bank for Reconstruction and Development which finances the compensation fund for Kozlodoui in connection with the close down of its four small generators. Emotion and his desire to preserve units 3 and 4 at any cost were not helping the negotiation process we were holding. In that situation and with a view to the strategic priority we have to settle, i.e. Bulgaria's EU integration, I think it is more expedient to put an end to the created distrust with EC representatives, Mr. Ovcharov said. He added that what mattered as well was the making public of the accident on March 1 with the N-plant's unit 5. Then 23 elements of the system for the generator's protection failed to operate, but the seriousness of what had happened was acknowledged only two months later, at that only after Georgi Kaschiev, former head of the Commission for Usage of Atomic Energy for Peaceful Purposes (currently, the Nuclear Regulation Agency), announced it in front of foreign mass media.
Ivan Ivanov's dismissal does not mean distrust or doubts in his professional skills, Mr. Ovcharov did not omit to note. And the already ex-executive director of the N-plant said they have worked in one and the same shift at Kozlodoui with Mr. Ovcharov. Therefore, it must have not been easy for him to make such a decision. However, it is one thing to look on the problems with units 3 and 4 from the position of a Kozlodoui's head, and another matter to consider the issue from the ministerial post, Mr. Ivanov pointed out. In the last few weeks he was laying the accent on the negative price consequences of the N-plant's two 440-megawatt units' decommissioning, agreed with the EU for the end of 2006.
However, the castling did not upset much the people from the branch. The only comments were that the sacked Ivan Ivanov will be probably given a quiet and comfortable position, at that not so much due to his close relations with the energy minister. It is well known that as an MP from the opposition Mr. Ovcharov himself was one of the most active advocates for saving the N-plant's small units. As far as the accident of March 1 is concerned, amid the scandal that followed he was declaring in public that nothing had happened in Kozlodoui (that's exactly how Ivan Ivanov reacted then). In fact, the cosy position of the N-plant's former head is being guaranteed by several especially important contracts he has signed, not without the knowledge of Roumen Ovcharov. However, in order to ensure his future role as an obligatory fuse, Mr. Ivanov was not relieved of responsibility for his activity in 2005 and 2006.
According to Kozlodoui insiders, even if a small part of the signed contracts becomes known to the broad public, Mr. Ivanov and his high-ranking patrons in power will have to give extensive and quite awkward explanations. At that, they would not concern the delivered spare parts for units 3 and 4 shortly before their decommissioning. The losses from that contract are said to be negligible as compared to the consequences from the contract for the delivery of fresh nuclear fuel for the units 5 and 6 from the Russian company TVEL, extended to the year 2020 by the signature of Mr. Ivanov in the beginning of March.
The extension of the contract's term is extremely important to Bulgaria because it guarantees supply in the long run, minister Ovcharov commented on March 9. No details were disclosed but according to informed sources, the negotiated price which the N-plant will be paying for a cassette of fuel for WWER-1000 is EUR550,000. The annual supply for each of Kozlodoui's big units is 160 cassettes, each of them containing 490 kg of enriched uranium. A research of the BANKER weekly showed that in 2004 a kilogram of uranium dioxide (processed into a nuclear fuel and placed in cassettes) was traded on the international market at USD1,100 on average. Prices rose by about USD50/kg in 2005, and dropped by USD10-15/kg afterwards. Thus, enriched uranium is currently traded at USD1,150/kg. Thus, the price for a cassette of fuel for WWER-1000 should be USD563,500. Under the new contract, however, signed by the already sacked Ivan Ivanov, Kozlodoui will be paying USD685,000 per cassettes (or EUR550,000). That is to say that the N-plant now pays for the Russian fuel almost 22% more than the price on international markets. As USD121,500 more is paid for each cassette, Kozlodoui loses USD 38,880,000 annually for the two big units. Probably, that surplus doesn't go to the producer TWEL, but is distributed among intermediaries along the road between the Bulgarian N-plant and the Russian company, branch insiders presume. According to them, the contract signed in March does not specify who the intermediaries are and their names might be known only to three or four persons in this country. The only chance that they come into the light is an eventual intervention on the part of the Prosecutor's Office. Then, the sacked but not relieved of responsibility Ivan Ivanov could be used as a fuse to gather all the negatives from that disadvantageous deal.
Indeed, it is not yet clear if the Prosecutor's Office will show interest in the parameters of the extended term for nuclear fuel supply, but the yellow card from Brussels due to our nuclear safety has been already shown. For the time being it concerns only the dismantling of Kozlodoui's units 1 and 2 and the decommissioning of units 3 and 4 on December 31. Minister Ovcharov was quick enough trying to shade the gaff by the explanation that the dismantling of units' 1 and 2 non-nuclear equipment would begin in July, while the second pair of small generators will be decommissioned in compliance with Bulgaria's commitments. But how would Mr. Ovcharov, the head of the Nuclear Regulation Agency Sergey Tsochev, and Kozlodoui's new Executive Director Ivan Genov explain their long silence about the accident on March 1 and their attempts to conceal its seriousness? People from Belgium's capital presume that the reaction of Bulgarian authorities and the causes of that accident might be part of the yellow zones in the EC's September report.

The new Executive Director of Kozlodoui N-plant is an expert in atomic energy. He graduated in Nuclear Power Plants and Equipment from the Moscow Energy Institute. In 1980 he was employed in the Kozlodoui N-plant, occupying all positions up to an engineer responsible for a generator. Later on he was appointed manager of the Operation department in the Electricity Generation - 2 unit.

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