Slovakia plans tax breaks to encourage nuclear project

Aug 9, 2006, 10:46 GMT

Bratislava - The new Slovak government may give a 10-year tax holiday to encourage the expansion of a controversial nuclear plant, a newspaper reported Wednesday.

Under the Ministry of Economy plan, the Italian energy firm Enel would receive tax breaks worth 'several billion koruna' (tens of millions of dollars) to build two, new reactors at the Mochovce power station, said the daily Pravda.

'We will proceed with this alternative according to needs if Enel accepts the construction contract,' ministry spokesman Branislav Zvara said.

Despite opposition to Mochovce from courts and environmental groups in Slovakia's western neighbour Austria, the doubling of the twin-unit plant was recently cited as a priority of the newly elected government of Prime Minister Robert Fico.

The government 'will support the construction and operation of new sources generating electrical energy, including finalization of the construction of the third and the fourth blocks of Mochovce,' said the administration's policy statement released last week.

Enel, which bought a Slovak utility including two nuclear plants from the Slovak government last year, previously announced plans to expand Mochovce by 2010 for 63 billion koruna.

Enel also plans to upgrade two of the four reactors at Slovakia's Bohunice power station. The others will be closed by 2008 for failing to meet European Union standards.

Mochovce and Bohunice were built during the Soviet era.

Environmentalists say the Slovak reactors are risky. Last year a court ruling in Vienna, 160 kilometres from the plant, backed a Greens party leader's demand that Mochovce be either upgraded or shuttered.

However, Slovak authorities declared the plant safe and said the ruling was not internationally binding.

Pravda said the government and Enel could sign a contract for the expansion and tax deal next April.