Daniel Benes is on the way out at CEZ. But his bad habits, and Karel Muzikar, remain.





The word on the street is that Daniel Benes of CEZ will soon follow the fate of Albania and Areva, and be dumped by an exasperated owner. And that Temelin II is now being led by the prime minister's favourite lawyer, Karel Muzikar Jnr.

We reap what we sow. Abandoning Albania will cost CEZ some €200m according to analysts. Saying au revoir to Areva will cost CEZ, at minimum, many months delay as legal disputes stall the bid process. And together, the two recent setbacks may well cost Benes his job.

The past might at last be catching up with the boy from Bohemia Coal. And yet, his single most outlandish decision, the startlingly overpriced procurement in 2008 of a spent nuclear fuel facility for Temelin from a shell company called CEEI, has been forgiven and almost forgotten.

It is foolish to forgive such things, and even more so to forget them. Just how foolish will become clear the moment the commitment to proceed with Temelin II becomes irreversible. This is because nothing fundamental has changed in CEZ or its majority shareholder since Benes selected CEEI five years ago. Nothing fundamental unless you consider the replacement of Martin Roman with Benes as fundamental. Or the appointment of Vaclav Bartuska as government envoy for Temelin II. Or the appointment of Karel Muzikar as senior legal counsel for the project.

The hope that Temelin II could be clean is misguided without meaningful evidence of an improvement in the governance of CEZ. Without such evidence, there is no reason to assume that the bad practices of the past, exemplified by the CEEI deal, will not be repeated.

What were the circumstances of this deal? As readers know, I have puzzled over the claim that CEEI enjoyed an exclusive relationship with GNS, the highly respected German manufacturer of spent nuclear fuel casks, and its subsidiary WTI, which designs the facilities in which these casks are placed.

Given CEEI’s dubious credentials, I considered such a partnership to be rather implausible. More fool me. Having had a chance to see a copy of a license agreement between WTI Wissenschaftlich-Technische Ingenieurberatung GmbH and CEE-IT Central Europe Engineering s.r.o. (CEEI was called CEE IT then), it is clear now that WTI did indeed undertake to sell its know-how to CEEI in May 2007. But because CEZ switched to a Czech design, CEEI never paid the license fee and the know-how, the project plan for the German spent nuclear fuel storage facility at the Isar nuclear power plant in Bavaria, was never transferred.

GNS has repeatedly stated that it cannot say who owned CEEI, which I take to mean that it refuses to say. It is worth reminding ourselves that GNS has licensed through its subsidiary GNB Essen the manufacture of its Castor casks to Skoda JS, a former Appian Group company sold to the Russian industrial group OMZ - Power Machinery in 2004. GNS actually licensed its Castor know-how to Skoda JS in 2001. When the Appian Group (Martin Roman et al) acquired Skoda Plzen in 2003 from the state, the license agreement had to be redrawn up with the new owners, and again in 2004, when Skoda JS was sold by Roman to the Russians. So we can assume that GNS knews quite a lot about the ownership structure of Appian -and of CEEI.

In short, Europe’s leading manufacturer of spent fuel casks and designer of the buildings in which they are housed made contractual commitments to sell the complete documentation to a brand new Bavarian spent nuclear fuel storage facility to a shell company represented by a lawyer in Liechtenstein.

We may conclude that the agreement was a way to lend plausibility to Benes’ preferred choice, with the Germans playing their part by providing his preference with, quite literally, paper-thin credentials. And in return, the Germans got –well, God knows what the Germans got in return.

None of this inspires confidence in the transparency of the nuclear power industry, Czech or otherwise. Nor does it inspire confidence in the ability of this government and its national energy champion to run a clean tender for Temelin II.

Daniel Benes may be on the way out. But his bad habits, and Karel Muzikar, remain.