Bankrupting Proceedings against Leningrad NPP

Publish date: October 14, 1998

Written by: Thomas Nilsen

For the first time in history, a nuclear power plant will face bankrupting proceedings in court. Leningrad region's bankruptcy office confirms that a company has convinced a court to open the case against Leningrad Nuclear Power Plant.

It is unclear what bankrupting a nuclear power plant would mean in Russia, but according to The Moscow Times, the Russian Ministry of Nuclear Energy (Minatom) fears that the court case would spawn a spate of similar lawsuits against other nuclear power plants across Russia. Leningrad Nuclear Power Plant owes $245 million to all of its creditors. The company which has convinced the court to open the bankruptcy proceedings is the Dagestani-registrated Rosvooruzheniye KBR, which holds $317,000 in veksels, or promissory notes, issued by Leningrad Nuclear Power Plant. The company filed suit with the St. Petersburg State Arbitration Court to force the plant into bankruptcy.

The plant’s manager has requested a meeting with its creditors, and one has been set for Monday next week in St. Petersburg. Russian bankruptcy law allows the courts to seize control of organisations that do not pay their obligations, and the law makes no allowance for nuclear power plants.

On the other side, Leningrad Nuclear Power Plant is owed $241 million from its six biggest debtors, which include the St. Petersburg power company Lenenergo and the power companies supplying the cities of Kaliningrad, Pskov, Vladimir, Yaroslav and Novgorod. In August, Leningrad Nuclear Power Plant filed its own court cases against the cities of Pskov and Kaliningrad over debts.

Moscow Times says the very possibility of bankruptcy has spawned dark humor: "The most popular joke here is whether an auctioneer can be found to sell the reactors to Saddam Hussein or Yasser Arafat."

Environmental groups are both sceptical and optimistic. "The situation at the power plant is nervous, people are very worried," said Oleg Bodrov of the Green World Association, an environmental group based in Sosnovy Bor, where the power plant is located.

"Hopefully it leads to something – preferably to immediate shutdown of the nuclear power plant", says Iida Simes in an interview with Bellona Web. Simes is an environmental activist in Helsinki, which is working with nuclear safety problems in Russia. Finland imports electricity from Leningrad Nuclear Power Plant.