CSSD Party Rejects Czech State Guarantees on Nuclear Bid

The largest Czech opposition party rejects all forms of state guarantees on the purchase price of electricity produced by the two planned reactors at the Temelin nuclear station, a shadow finance minister said.

“We support the Temelin project, but only under the condition that the state will provide absolutely no guarantees on the power price,” Jan Mladek, the Czech Social Democratic Party official, said in an interview at the Bloomberg office in Prague yesterday. “Otherwise there’s a real danger that it would increase both the budget deficit and state debt.”

CEZ AS (CEZ), the state-controlled utility which plans to add reactors at the Temelin nuclear power station, is scheduled to pick the winner of a $10 billion expansion tender this summer. Chief Executive Officer Daniel Benes has asked the current Cabinet to provide a fixed purchase price for the power produced by the new reactors to ensure the project’s profitability.

Such a guarantee could put too much strain on the state’s finances, said Mladek, whose Social Democrats are riding a wave of voter discontent with the austerity policies of the center- right government of Prime Minister Petr Necas.

The party, known as CSSD, would get 84 of 200 seats in the lower house of parliament if elections were held now, compared with 42 seats for Necas’s Civic Democrats, and 29 for the junior coalition partner TOP09, according to a Stem poll conducted two weeks ago. No margin of error was given.

“The outlook for electricity prices is negative, so the taxpayers would bear all the risk, which is unacceptable,” Mladek said. “We could end up paying the same kind of subsidies like for solar power.”

CEZ is planning to sign a final contract in the Temelin tender before the end of this year. Westinghouse Electric Corp. and a Russian-Czech consortium led by Rosatom Corp.’s unit Atomstroyexport are the sole competitors after CEZ threw out Areva SA’s (AREVA) bid last October. Areva has filed an appeal with the Czech anti-trust office over the exclusion.

Shares of CEZ were down 0.2 percent to 646.9 koruna at 9:35 a.m. in Prague. The stock has lost 5 percent of its value since the beginning of January.

To contact the reporter on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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