Slovak Prime Minister Robert Fico has threatened the Italian energy provider Enel with expropriation if the company does not finish the third and fourth unit of the Mochovce nuclear power plant on time.
Enel became the majority owner of Slovakia's leading power producer Slovenske Elektrarne in 2005. It has invested €1.8 billion in the Mochovce project, which was set to start this summer and is scheduled for completion in 2013. Enel has rejected the criticism and claims that the work on the power plant, situated in the western part of Slovakia, will finish on time.
The threats comes just a week after Fico said that energy companies faced expropriation if they failed to incorporate the social considerations into their pricing schemes. He referred to Article 20 of the Slovak constitution, which allows expropriation as a possibility in the public interest. The populist left-leaning prime minister has long promised to “get tough” on energy companies. In July his government authorised the capping of energy prices to ease energy bills for low-income households. Fico has also been critical of the previous government's sell-off of important energy companies to foreign investors such as Enel.
Legal experts in Slovakia concede that expropriation in the public interest could theoretically occur, but is unlikely since the state would have to pick up a hefty compensation bill. In addition, “expropriation” in this provision of the law relates more to confiscation of land for road and transport construction than the power to expel a foreign company. Political observers in Slovakia also says that Fico has made similar threats before which have been interpreted as voter-tailored rhetoric.
