Mr. Solfelner, what will be the company's investment policy in the new regulatory period and which projects would you like to highlight?

With its decision of June 2008, the State Energy and Water Regulatory Commission (SEWRC) asserted a single framework for the entire regulatory period, 1.07.2008 - 30.6.2013, pursuant to which our investment commitments amount to 119 million BGN per annum. We believe that these parameters will apply in future pricing periods as well. In any case, it is essential that all these parameters be defined in a clear and transparent manner and be adhered to, this is to the benefit of all stakeholders. EVN Bulgaria investment policy has always been customer oriented. The company has always strived to put as many resources as possible into upgrading the network, in the construction of new facilities, as well as to improve the customer service in southeastern Bulgaria. This was the only way for the network that we operate to withstand the construction boom in coastal and mountain resorts after privatization. Behind each investment in tourism, industry, etc., there is the need of electricity network investment – not only upon accession, but also in building the network together with high voltage equipment. The truth is that no sufficient funding has been provided for energy system rehabilitation in the years after 1990, hence the gradual aging of the network. So we invested over BGN 600 million only in the network of medium and low voltage after the privatization in 2005, which nevertheless is certainly not enough.

Mr. Manchev, what will happen to the Belene NPP project, if the National Electricity Company (NEK) does not extend the contract with “Atomstroyexport”?

I would not commit myself to any specific answer. “Atomstroyexport” will most likely lay claims through the court. What would be the effects to the state? The effects would be tragic, because the arbitration is in Paris. “Atomstroyexport” will substantiate the expenses they have incurred and the National Electricity Company (NEK) will be made liable for them. This will penalize NEK for two reasons. Firstly, the company will be prosecuted by an international court within the European Community for specific liabilities and will have nothing to do but to fulfill the obligations imposed by the court. Secondly, the contract regarding Belene NPP will be terminated and all the expenses incurred so far that are off-balance sheet value for NEK at the end of the year will become net book value, which means that there will be a huge deficit in the company account.

Mr. Tzotchev, at what stage is the process of reviewing the technical design of Belene NPP?

Since April 2008 we started receiving stepwise the technical design documentation, including the Intermediate Safety Analyses report and the probabilistic safety analysis of Belene NPP. This continued until the spring of 2009. the review of the documents, however, started simultaneously with their receipt. We conducted an internal expert review within the NRA as well as by means of external engineering organizations. Once the expert reviews were completed, by September 2009 we submitted all the comments, remarks and requests for changes regarding the documentation to the National Electricity Company (NEC). Our main demand was for the technical design and the other documents to be revised once again and submitted to us for review afterwards. At the end of May 2010 we received a new revision of the design and we are now preparing to start a subsequent expert review, during which we will see whether and to what extent our remarks have been taken into account.

What happens if you are not ready by September? Will this affect NEC - “Atomstroyexport” relations and will they be able to pursue their activities?

Neither I, nor the NRA could have a say over the kind of agreements NEC and “Atomstroyexport” are to negotiate and the conditions for their extension. As for the process of approving the design, it will continue until we are ready. I think it is unrealistic to expect us to review the entire documentation and come up with a statement within two months only. In all cases, it will take longer.