The CZK 500 billion game

Although ČEZ is a joint-stock company, 70% of it is controlled by the state. Since it is the state that manages important security risks in the nuclear energy sector, this is essentially a government tender and politicians and officials will certainly greatly influence its course. The so-called Kalousek environmental supertender worth CZK 100 billion no longer looks as looming in comparison. Politicians making the call in a deal of this magnitude happens once in a decade.

The probability that the tender will not go through or take off is close to zero; the demand for nuclear energy is on the rise both in Europe and globally. New power plants are scheduled to go up in China, India, Russia, the US and the UK.

Understandably, investment into nuclear science, research and education is being renewed and boosted. Nuclear engineering, which has been on hiatus for a few decades mainly in Europe and the US, has become a retiree's profession. But this is bound to change in the next few years.

Conversely, politics is marked by weak chances. Even if the Greens make it into parliament, they won't get into the cabinet without giving in on the nuclear energy issue. The world has simply changed, and, in contrast to our southern and eastern neighbours, nuclear energy is sought after in the Czech Republic. While the Germans, Austrians and Italians are holding back on or rejecting nuclear power, ČEZ decided to make use of the demand and profit from energy exports. While during the First Republic we manufactured shoes and machinery, in the coming decade, we are heading to becoming Europe's superexporter of electricity.

The elephantine tender is doubtlessly and essentially decisive for the country's future direction; its outcome could substantially affect the Czech Republic's position regarding its dependence on Russia, which will either culminate and then stabilise or, conversely, relax.

Conversely, politics is marked by weak chances. Even if the Greens make it into parliament, they won't get into the cabinet without giving in on the nuclear energy issue. The world has simply changed, and, in contrast to our southern and eastern neighbours, nuclear energy is sought after in the Czech Republic. While the Germans, Austrians and Italians are holding back on or rejecting nuclear power, ČEZ decided to make use of the demand and profit from energy exports. While during the First Republic we manufactured shoes and machinery, in the coming decade, we are heading to becoming Europe's superexporter of electricity.

The elephantine tender is doubtlessly and essentially decisive for the country's future direction; its outcome could substantially affect the Czech Republic's position regarding its dependence on Russia, which will either culminate and stabilise itself or, conversely, relax.

Why Russia?
There are four potential suppliers: Russia, US, France and Japan. France's weakness is an ongoing quarrel between investor and supplier – with talk going around of a billion euros – in a tender to construct a power plant in Finland. The Japanese have never been much interested in this region from this standpoint. So, the two minions are America's Westinghouse and Russia's Rosatom. From the two, Russia has the lead. The reasons are clear.

1. The Russians own the company Škoda Jaderné strojírenství, and the firm still belongs among top technology companies in Eruope. The Russians can argue that through this company, they would be able to creat maximum job opportunities in the Czech Republic. Westinghouse has less to offer in this respect.

2. Russia is planning to replace a whole generation of nuclear power plants. The Russians will build plants in China and India, and this wave of investments could include the construction of five reactors for ČEZ. They can also promise that Czech companies will also have a role to play. And the Russians will probably be able to offer the best price.

3. The Russians would also be better able to make use of the existing first two blocks of Temelín.

4. The Russian company Tvel will soon start supplying nuclear fuel for Temelín.

5. Corruption capabilities (if needed) are much more developed in Russia than in the United States.

Not giving up
Five years ago, the Czech government disqualified Unipetrol Karachy from the tender, stating that the business presented a security risk. It didn't have to bother explaining too elaborately. But could it afford to do the same in the case of Russia and ČEZ? Hardly. Were that to happen, Russia might suddenly have issues with broken oil or gas pipelines, or it might just turn the tap off. As if by chance, at the very same time, the threat of RWE selling Transgas to Gazprom and the Polish PKN Orlen selling Česká rafinérská to Lukoil might loom large. And what if Russia no longer feels like supplying gas to power plants that ČEZ plans on constructing? It almost looks like we are trapped.

Still, let's not be fatalistic. Westinghouse might still propose a better offer, and, for us, the vision of a strong Russian presence might become an impulse for two mediations. For one, we can save elsewhere and make it our priority to, for instance, construct alternative gas pathways both from the south and north. If Czech society truly cares to weaken Russian influence, it must be willing to invest in port terminals in, for example, Poland or Slovenia, as well as into additional gas pipelines.

But, above all, Russia won't be exporting communism but its legal-political culture so that Russian entrepreneurs would feel at home. Czech society can nonetheless defend itself: Even with a growing Russian economic influence, everything can come to a good end if we take the fight against corruption seriously, if we set transparency as our priority, if our regulations become "western" and are adhered to "in a western manner", if our justice system becomes truly independent and laws are as strict for power elites as for ordinary citizens. Then, Russian influence can seep in, but whether our rules stay ours remains our business. The worst move would be to lie on our backs and give up.

Translated with permission by the Prague Daily Monitor.