Westinghouse's exclusion from nuke tender logical - analysts

Prague, Jan 31 (CTK) - The elimination of US company Westinghouse from the tender for new nuclear units in the Czech Republic is a logical consequence of the fact that Westinghouse, unlike its competitors, did not submit a binding offer, according to analysts contacted by CTK.

The government said today it would invite only French company EDF and South Korean company KHNP to submit binding bids for the construction of up to four new reactors at the Dukovany and Temelin nuclear power plants. So far, the nuclear tender has included a binding offer for one unit at Dukovany and a non-binding offer for three other units. The government justified its decision not to address Westinghouse in the next phase of tender by saying the company had only submitted a non-binding bid and could not be considered comparable in the evaluation.

"The US firm was probably leaving the back door open, which would have had a negative impact on the project's progress, so it is good that it was excluded from the tender," said XTB analyst Tomas Cverna.

"It is, however, a surprise that Westinghouse approached the tender in this way. Earlier it seemed that all three companies were seriously interested in the tender," he added.

Today's announcement by the government is a consequence of Westinghouse's decision, said Jiri Gavor, head of the association of independent energy suppliers. "If, unlike its competitors, it refused to submit a binding offer for four units, its exclusion from the tender is the logical consequence. This is a pity because Westinghouse is the only bidder that already has a functional unit with the required capacity," he said.

Capitalinked.com analyst Radim Dohnal expects that reducing the number of bidders to two will reduce the competitive environment between them. According to Gavor, this will not affect the final price of the new units. "But I do not think it will lead to an increase in price by the remaining bidders. After all, the basic price parameters have already been submitted," Gavor said.

According to the cabinet's statement, the construction of multiple reactors would be up to 25 percent more profitable than the construction of only one unit.

According to Dohnal, "the government's option for up to four rectors looks like a complete science fiction in terms of the size of the Czech economy and especially the national debt." But at a time of a strong nuclear renaissance, ordering more reactors is probably a necessity to get a better price, he said.

tam/er