President Klaus and his Russian counterpart must be delighted by the outrage in Paris at the trashing of the French bid for Temelín. And Washington must be wincing.

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“I deeply regret the fact that Areva is being penalised based on matters that have never been discussed between the parties, without dialogue or clarification.”

No one hearing the words of Luc Oursel, Areva’s CEO, can fail to feel the suppressed outrage of the French at the way their bid for Temelín II has been rejected. And in a move calculated to wound French pride yet further, prime minister Petr Nečas rallied to ČEZ’s support, publicly lambasting the French offer as hopelessly ill-prepared.

President Klaus and his Russian counterpart must be tickled pink at the French reaction. And Washington must be wincing.

While the rest of us are left scratching our heads, trying to figure out why the Czechs should have dismissed the French nuclear offer in so summary and inelegant a fashion, I was intrigued by the startling simplicity of the explanation given by Erik Best of the Final Word.

“It's all part of the plan gradually to take over assets (or projects) in the country from foreign owners,” Best writes, and goes on: “No matter how sloppy Areva's bid might have been, ČEZ could have found a way to allow it to continue if it had wanted to.” It did not want to.

But all the Temelín bidders are foreign. Indeed. But the point Best is making, I think, is that this generation of Czech decision-makers regards the Russians as much less foreign.

Many highly-placed public figures in this country, from the president down, would argue that Russia is just as legitimate a geopolitical partner for this country’s nuclear industry as France or the USA. This is debatable.

But there are clear public policy reasons to favour the Russian bid, of which perhaps the most compelling is cost. The Russian option is likely to be the least expensive option for the Czech state and its backers, Czech taxpayers, who will have to subsidise the construction of Temelín to the tune of almost Kč 20 billion a year by our calculations.

The Russians have offered fully to fund (not pay for -they will be reimbursed by Czech taxpayers) the project without guarantees from the Czech state, becoming if necessary shareholders in ČEZ itself. And it is this last offer that will wreck the chances of the French and the Japanese-American bid. Neither Areva nor Westinghouse is willing to fund the project, at least not without watertight guarantees from the Czech state, and neither is willing to become a shareholder in ČEZ. And more to the point, the Czech government would not want them as shareholders. Foreign companies mean scrutiny.

The fact that the Russian companies are offering to fund the project without guarantees from the Czech state can be taken as an indication of how confident they are that they will get their money back -at least in kind. To understand better the appeal of the Russian bid for the Czech ruling elite, or why the Russians are ‘less foreign’, we need simply to remind ourselves of the hybrid status of ČEZ.

Areva (which is majority owned by the French state) and Westinghouse operate in mature democratic states under the rule of law. The management of these companies are held accountable by their shareholders and the regulatory authorities. In short, they are transparent, at least in comparison with their Russian and Czech competitors.

Rosatom and OMZ (owner of Škoda JS), on the other hand, are answerable to the Kremlin. Like ČEZ, the management of these companies reports only to politicians. Private shareholders are ignored. Like ČEZ, they are opaque, at least in comparison with Areva and Westinghouse. It is this 'deficit of accountability' that makes the Russian bidders so much less threatening to the politicans that control ČEZ than the French and the Japanese-American bidders.

ČEZ’s regulators, who are appointed by politicians, are unable to play the role of independent arbiter as they struggle to hold accountable a company whose shareholders are their political superiors. If ČEZ was a genuinely private company, rather than the hybrid energy arm of the Czech state (and the private interests that have captured the state), the regulator would treat it as any other dominant private company. It would be less motivated to protect ČEZ, and more willing to demand and to publish information –such as the details of the offers of each bidder for the construction of Temelín II, which, if it is to happen at all, will only happen thanks to massive public subsidies.

And if ČEZ was a genuinely private company, its shareholders would be motivated to hold the management accountable for value-diluting decisions, such as the shockingly overpriced erection of a spent nuclear fuel storage facility by a shell company registered in Liechtenstein, through the supervisory board. The management would focus on maximising shareholder value and resist pressure to support possibly competing objectives of the state as dominant shareholder –such as the forging of a nuclear partnership with the Russian state.

The construction of Temelín II makes no economic sense. It will destroy shareholder value in ČEZ. But it might make geopolitical sense for the Czech state. And if you subscribe to the theory that there is no meaningful difference between the state and the mainstream political parties that run it, the construction of Temelín II might make party political sense as well.

In short, Rosatom and OMZ are ideal partners, even shareholders, for ČEZ. In essence, Temelín II is a government-to-government deal. And neither government wants, nor will it demand, real scrutiny of the process and of the rent seeking that is an integral part of it.