Ex-communist Europe
The Czech Republic and energy
Ice-hockey politics
Apr 11th 2011, 15:12 by G.F. | PRAGUE
A PLANELOAD of Russian officials and other big shots were in Prague over the weekend to take part in a charity ice-hockey match against a set of Czech counterparts. Heading the Russian delegation was a hockey buff named Alexander Medvedev, better known as the blunt-spoken head of the export arm of Gazprom, Russia's state-owned gas giant. Among the ministers, governors and celebrities on his team were Alexander Zhukov, a deputy prime minister, and Arkady Dvorkovich, President Dmitry Medvedev's economics adviser.
The Czechs boasted their own team of heavy hitters, including Mirek Topolánek, a former prime minister whose bungling of his country's EU presidency in 2009 helped bring down his government. Mr Topolánek has been one of Prague's most strident critics of Russia, which he has accused of suffering from "genetic messianism", most recently for using its vast supplies of oil and gas to grow its sphere of influence in Europe. As prime minister he promised to diversify the Czech Republic's energy supplies.
But that didn’t stop his government from awarding Russia's Lukoil a contract to provide 20% of the jet fuel used at Prague's international airport. On Saturday Mr Topolánek was beaming at a news conference before the game at an ice rink near the Prague castle, perhaps because since having left office he has worked as a lobbyist for energy and other companies pushing for closer ties to Russia. His voice is important in an energy contest with a far bigger prize than just the oil and gas business.
The real reason for the Russians' trip, according to at least one report in the Czech media, was to promote Moscow's bid in what would be the biggest business deal in Czech history. Atomstroyexport, Russia's state agency, is competing against Japan-owned Westinghouse and France's Areva for a contract worth between $15 billion and $30 billion to build two reactors at the Temelin nuclear power plant in the country's south, and possibly more elsewhere. (Russia has responded to Japan's nuclear crisis by stepping up efforts to flog its own reactors, which Mr Medvedev recently characterised as "absolutely safe".)
The Czech official overseeing the Temelin tender, Václav Bartuska, is against the Russian bid, saying Moscow would use control over the plant to influence Czech politics. "It's a civilisation choice," he says. But his has been a lone voice, criticised even by his own government for being "too pro-Western". Václav Klaus, the president, has backed Atomstroyexport.
Many Czechs believe the Russians are out-lobbying their competitors. Moscow is publicising its bid by promising to subcontract 70% of the work to Czech companies. What it doesn’t say is that the main beneficiary would be a Czech nuclear engineering firm recently bought by OMZ, a Russian state conglomerate.
The bid is set to be decided later this year. In the meantime, expect more PR exercises like the weekend's hockey match, which the Czechs won 6-5 with a last-minute goal.
Eastern approaches deals with the economic, political, security and cultural aspects of the eastern half of the European continent. It incorporates the long-running "Europe.view" weekly column. The blog is named after the wartime memoirs of the British soldier Sir Fitzroy Maclean.
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Once upon a time Czechs was desperately worried about economic domination by Germany. When they sell off their energy generation and distribution network to the Russians, then they will find out about what economic domination really means!
Victor, don't you think that anti-nuclear groups would actually prefer a non-Russian technology as "Russian" is not exactly perceived as a brand of "quality" and "safety"?
Anyway, I would expect that Russian offer stays on the table till the very end at least to pressure the other bidders to make their offer more appealing.
Lastly, the promise of subcontracts to Czech firms is a joke as nobody knows who is the real owner of the contracted companies - in Czech Republic the equities may hide the actual shareholders. They may be companies registered in Czech Republic but owned by Russians.
The Austrians will go crazy.
Temelín nuclear power station now combines the original Russian reactor with some American technology. If the French Areva wins this contract, Temelín will be an absolutely unique technological hybrid, one might even say a 'mutant'.
Just to be clear, I am sure the plant is and always will be perfectly safe, but the anti-nuclear groups will probably suffer a seizure when they learn about it.
Tomas, good analysis indeed.
Andrew Norfolk writes: "...case when Russia's involvement led to anything positive." ----- How about preventing Georgian lunatic Saaksvilli from slaughtering innocent civilians in Ossetia?
A joke from hockey politics (or political hockey in this case).
Czechoslovakia won against Soviet Union. Soviet Union sent telegram to Czechoslovakia:
Congratulations STOP You were a better team STOP Gas STOP Oil STOP
Thanks for the article. I haven’t even noticed this event. (These days Czechs are fully captured by the thrilling political game launched by shadow economic structures in order to remove the political party that aims at cutting them from their state purchases profits and influence on police out of government…)
I don’t think that Russian politicians would be more active lobbyists than politicans of countries of the other two competitors. Westinghouse (an American company that has supplied secure equipment to Temelin originally) has taken advantage of US president Mr. Obama’s visit as well as appointing Mr. Norman – a new US ambassador to Prague – to lobby for Westinghouse. Similarly, French politicians have lobbied for Arriva even willing to “restart” the relationships that have been troubled during the Czech EU presidency.
So I believe that it should be the real quality of the complex offer that should be the main criteria of the tender. Obviously, Russian Atomstrojexport has received strong points by offering large subcontracts for Czech companies, French Arriva’s strong point is that it’s an EU company and Czech and French could further cooperate in coordinating energetic policies within EU and Westinghouse’s strong point is that it has previous experience with supplies for the existing blocks of the power plant. That’s why nothing suggests that the decision on this contract should be political but it will surely not be easy.
If you're a country in CEE, you want Russia to stay away from you as far as possible. I just can't seem to remember a single case when Russia's involvement led to anything positive.