Hungary approves controversial nuclear project with Russia

BUDAPEST - Hungarian lawmakers approved Thursday a controversial Russian-financed extension of the country's only nuclear power plant, despite concerns in Hungary and Brussels over transparency and fair competition.

Last month, Prime Minister Viktor Orban struck an agreement with Russian President Vladimir Putin in Moscow for Russia's atomic energy corporation Rosatom to build two new reactors at the Paks plant - located about 100 kilometres (60 miles) south of Budapest.

The agreement also stipulated that Moscow would lend Budapest up to 10 billion euros (S$17.2 billion, US$13.7 billion) - around 80 per cent of the estimated cost.

Criticism has been levelled at the deal however because the exact terms of the loan have not yet been made public, nor was any formal bidding process for the plant's expansion ever launched.

European Union rules stipulate that any state project must be awarded through a tender process.

An EU spokesperson told Hungarian newspaper Nepszava on Wednesday that an investigation into the deal may be launched over suspicions it breaches EU law on several points.

Hungarian opposition leader Gordon Bajnai said Thursday the agreement was "against the national interest", and would "give up Hungary's independence".

After the vote he called on Hungary's president Janos Ader not to sign off on the legislation.

The upgrade to the Paks facility - which currently produces 40 per cent of the energy consumed in Hungary - would boost production to 4,400 MW from 2,000 MW, with the first new reactor scheduled to begin operation in 2023.