Germany's Siemens reveals why it maintains nuclear ties with Russia

The industrial giant is working alongside Rosatom on the Paks-2 power plant in Hungary

German manufacturer Siemens Energy has no intention of breaking its contract with Russia’s Rosatom on their nuclear project in Hungary, the company’s supervisory board chairman, Joe Kaeser, told Welt am Sonntag on Sunday. The companies are working together on two new reactors for Hungary’s Paks-2 power plant, for which Siemens Energy is supplying safety technology.

Asked to comment on the criticism the company is facing due to its continued cooperation with the sanctioned country’s nuclear giant, Kaeser said that non-compliance with its contract with Rosatom could lead to legal proceedings by Hungary against Siemens Energy and hefty fines.

“There are non-governmental organizations that demand that our management doesn’t comply with these valid contracts and is then possibly sued by an EU state for almost unlimited sums,” Kaeser said.

He also noted that the decision to continue working with Rosatom would allow Siemens Energy to ensure the safety of the plant and alleviate fears of potential emergencies. According to Kaeser, if the company abandoned the project, the alternative “would be for the Chinese to step in and supply the controls for the nuclear power plant, which is much closer to Germany than Chernobyl was back then.”

The Paks-2 project was launched in 2014 under an agreement between Hungary and Russia. It envisaged the construction of two nuclear reactors by Rosatom and a Russian state loan to finance the majority of the work. While the four existing reactors at Paks produce some 2,000 megawatts of electricity, or roughly half of the country's needs, the new reactors are expected to increase the plant’s capacity to 4,400 megawatts.

Speaking to RT earlier this month, Hungarian Foreign Minister Peter Szijjarto said that the construction process had already started, and that the plan is to connect the two new blocks to the country’s power grid by the beginning of the next decade.

Szijjarto conceded that the project was under pressure, with the EU continuously floating the possibility of adding the nuclear industry to Ukraine-related sanctions on Moscow. However, Szijjarto said that Budapest would veto any measures that target the sector, “because for us it would be totally against our national interests.”

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Siemens Energy’s participation in the Paks-2 project has not been without hiccups, however, with Berlin repeatedly blocking its applications for an export license to supply technology and equipment due to sanctions and Germany’s nuclear phase-out. However, both Russia and Hungary recently confirmed that the company is still part of the project.

Last month, Rosatom head Alexei Likhachev pledged that the Paks-2 project would be completed despite Western sanctions or any criticism it might face.

“A lot of arrows are flying from Brussels, Washington, and London towards both the leadership of the Hungarian Republic and the project itself, but this is a case when the caravan is already on a roll and will be rolling forward no matter what,” he stated, noting that the European Commission had already greenlighted the construction of the plant earlier this year.

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