Nicholas Watson in Prague -

Even by the notoriously slow standards of the nuclear industry, the 30-plus years that Bulgaria's nuclear power plant at Belene has been under construction must serve as some kind of a record. As such, few expect January's national referendum on whether or not to restart building the on-again-off-again nuclear plant will provide any clear indication of its fate.

The referendum, due to be held on January 27, has been pushed by the opposition Bulgarian Socialist Party, which was in power when the latest move to restart building the 2,000-megawatt (MW) Belene plant was made in 2005 with an international tender to choose a reactor maker. That tender was won by Russia's Atomstroyexport in 2006, which officially began building the plant in September 2008, some 27 years after the site was originally approved in 1981. Completion of the two reactors was forecast for December 2013 (unit 1) and June 2014 (unit 2).

However, only preliminary site activities were carried out and later suspended because inevitably things immediately started to go awry: delays and other problems saw the plant's price soar above the originally estimated €4bn; the global crisis struck in 2008; the government's strategic investor, German utility RWE, pulled out in 2009; and the Bulgarian Socialist Party was ousted in elections that year by Prime Minister Boyko Borisov's GERB party, which after waffling for several years over the subject finally killed it in March this year.

That decision infuriated the Russians (perhaps understandably), as well as the Bulgarian Socialist Party and its supporters (less understandably so). The Russians have now decided to sue to Bulgarian state for more than €1bn in an international arbitration court to try to recoup some of the losses they claim they have incurred, while the Bulgarian Socialist Party is pushing to restart a project they say is essential to Bulgaria's economy and its future energy security. The Russians may well have a point, but critics say the arguments put forward by supporters of Belene are economically illiterate.

Boondoggle at work

The advisory firm Candole Partners in a 2010 report calculated that Belene would have to sell electricity anywhere between its variable cost (€21 per megawatt hour) and its total cost (€51-80/MWh), which is three- to ten-times higher than the price that the country's other nuclear plant at Kozloduy sells at on the regulated market. These kind of numbers are backed by HSBC, which was hired by the Borisov government to do an audit of the Belene project and put the cost of the plant at €10.35bn under the best-case scenario, which works out at about €75/MWh.

The government has used the HSBC report to justify its decision to scrap the project, though some sources question HSBC's objectivity given the global lender was picked as one of the lead arrangers for the state's €950m Eurobond that was issued just months later. Even so, as Georgi Vukov of Candole Partners in Sofia, points out, if the project was economically sound, there would have been more interest from the private sector. "I don't see it as a profitable project and this is reflected in the lack of private investor interest," says Vukov. "If it was even a breakeven project, someone by now would have expressed an interest after RWE pulled out."

In fact, there has been some private sector interest shown, but the farce surrounding that event only highlighted the project's dismal prospects and the real reason why the Bulgarian Socialist Party and other actors are so keen to keep Belene alive.

In September, a hitherto unknown and recently US-registered company called Global Power Consortium out of the blue expressed an interest in negotiating with the government to become a strategic investor in the project.

Alarm bells started ringing, though, when it turned out Bogomil Manchev was involved, a man whose tentacles reach deep into Bulgaria's energy and construction business through his Risk Engineering company and who featured in US diplomatic cables leaked by Wikileaks that bore the heading, "DIRTY ENERGY: CORRUPTION AND LACK OF TRANSPARENCY PLAGUE BULGARIAN ENERGY SECTOR". Manchev declared that the consortium brought together George Soros' investment fund Quantum Group, two large strategic investors, a big US bank and one operator. Emil Harsev, described by one local as an "innovative-minded Bulgarian financier", also turned out to be acting as a consultant to the mysterious Global Power Consortium; he told Novinite that a total of nine companies were involved in Global Power Consortium, which apparently had already made contact with Atomstroyexport. Alas, later enquiries found that neither Quantum nor Atomstroyexport had ever heard of Global Power Consortium.

The Global Power Consortium rigmarole illustrates well the real reason why so many are keen to see the Belene project keep rumbling along: money - and lots of it.

On December 5, Novinite revealed that a report from the Public Financial Inspection Agency (PFIA), now before a parliamentary committee, had found that a total of BGN300m (€153m) allocated in the state budget in 2008 for the creation of a Bulgarian-German joint venture to build the Belene plant had disappeared. According to the PFIA report, the money was spent even though the Bulgarian-German company was never registered.

Before that revelation, independent estimates put the amount of money spent on what is currently a large construction site at Belene at anywhere between €600m and €1bn. Even if nothing more is built or upgraded at Belene, the site needs to be maintained, which costs tens of millions a year. And should the project go ahead, local subcontractors like the ten that the Wikileaks cables claim belong to Manchev would benefit enormously. And as Candole's Vukov notes, "as is often the case in Bulgaria, these subcontractors are never chosen by the most transparent procedures."

So if the money explains much of why the elites are so keen to see Belene at the very least remain on oxygen, how does the referendum fit into their plans?

Vote yes or no, it doesn't matter

Analysts say there is little that the referendum can achieve either way except to keep the project in the public eye ahead of the general election in the summer of 2013 and to distract from the real problems that afflict the country - which is probably the point.

For one thing, critics say having a referendum on such a complex issue is pointless, because few if any of the public can fully grasp the issues behind it. This is backed by the public itself - a November poll conducted by the National Public Opinion Centre found that only 7% of respondents said they were well informed about matters of nuclear energy and purposefully look for information on the subject.

The poll also found that of those who intend to vote in the referendum, 62.5% said they would vote 'Yes' and 37.5% would vote 'No'. Meglena Kuneva, leader of the party Bulgaria for Citizens Movement, says the high level of public support for nuclear power shows what a "meaningless" referendum it will be. "It is clear that people here generally support nuclear energy... The opinion of the majority of Bulgarians is clear and there was never ever doubt about it. There is no conflict in the public opinion, so there is no need for them to ask us whether we want to have nuclear energy or not," she said in a November interview with Novinite.

Further, such a result would be invalidated in any case by the low expected turnout. To be valid, the referendum must attract a voter turnout equal or higher than that at the last general election, which was 4.35m people or 70% of Bulgaria's electorate. Few if any believe that likely.

Finally, critics say the format of the referendum appears almost designed to provide a result that will ultimately be meaningless. After much debate in parliament, politicians arrived at a question that will be put to the electorate that doesn't even mention the word "Belene" in it: "Should the nuclear power industry in the Republic of Bulgaria develop through the construction of a new nuclear power plant?"

So, as Vukov points out, if the answer is 'Yes', it doesn't mean Belene should be built. And if it's a negative result, "some kind of dialogue will continue because there is too much private sector interest in keeping this project alive."

Belene promises to continue exhibiting a half-life that's fittingly long for the nuclear industry.