Suppliers

The Hungarian companies and businesses have a significant role in the Paks II. project. Hungarian Act II of 2014 set the objective to reach the 40 % domestic participation of the project, thus providing Hungarian job opportunities. In certain jobs, for example during the establishment of the construction and assembly base the Hungarian supplier ratio could significantly exceed the 40 % target. 

In addition the Russian Party is committed to select 55% of the project’s suppliers according to the European Commission’s requirements via public procurement. These tenders do not allow companies or organisations to participate which belong to the Rosatom group. Considering that Hungary signed a fixed-price, turn-key contract with the Russian Party, the subcontractors are involved by the Russian Party in the investment via public procurement procedures. 

Paks II. Ltd. as a nuclear licensee developed and operates a qualification system in accordance with the effective law in order to select suppliers and verify their suitability. 

Paks II. Ltd. audits the suppliers involved either by its own or the Contractor during the nuclear qualification process for each contract which has nuclear safety relevance. 

The condition for starting work under a contract having nuclear safety relevance is only possible after a successful nuclear qualification.

The current public procurement announcements of Joint Stock Company Atomstroyexport (ASE JSC) are available here. 

Based on the mandatory reporting required by the Act CXLIII of 2015 on Public Procurement, the information and documents of public procurements started by Paks II Ltd, as contracting authority, can be found on the respective online database of the Public Procurement Authority of Hungary. The actual public procurement notices can be found here. 

 

Nuclear qualification:

In accordance with the applicable law, with special attention to Act CXVI of 1996 on atomic energy as well as HAEA Decree No. 1/2022. (IV.29) and its annex Nuclear Safety Codes (NSC), Paks II. Ltd. has developed and operates a qualification system for the selection of suppliers and certification of their suitability for the works to be performed. Suppliers may perform activities important to nuclear safety solely with the approval and under the continuous supervision of Paks II. Ltd.

Paks II. Ltd., in its activity to maintain the capacity of the Paks Nuclear Power Plant, makes sure of the suitability of suppliers to be engaged by itself or by its Contractor ( ASE JSC) in accordance with the EPC (Engineeering, Procurement and Construction) Contract in respect of activities important to nuclear safety.

Accordingly, participation in the Project is possible in two ways:

1. As a supplier directly subordinated to Paks II. Ltd. which means participation in performing activities related to the contractual obligations of Paks II. Ltd.
   The management of suppliers of Paks II. Ltd. takes place in the frame of procurement procedures carried out by Paks II. Ltd. Based on the information obtained in relation to the individual contracts to be concluded, a decision is made whether it is necessary to conduct the nuclear qualification process of the supplier with regard to the performance of the relevant contract. If it is necessary to carry out the qualification, Paks II. Ltd. conducts the process before concluding the contract.
2. As a member of the supply chain of ASE JSC which means participation in performing activities related to the contractual obligations of the Contractor.
   Following the selection of potential suppliers, the Contractor submits information on the contract which it intends to conclude to Paks II. Ltd. in accordance with the EPC Contract. On the basis of the information provided by the Contractor, Paks II. Ltd. decides whether is necessary to conduct the nuclear qualification process of the supplier with regard to the performance of the relevant contract and what kind of qualification process shall be conducted. If it is necessary to carry out the qualification, the process is carried out in the way agreed by the Contractor in advance. (More information on the activities belonging to the Contractor’s scope are available at https://zakupki.rosatom.ru.) 

 

Important information on the nuclear qualification procedures:

1. Basically, the qualifications are carried out in accordance with the Hungarian applicable law and the requirements stipulated in the subcontracts of the individual organizations (concluded or planned to be concluded) as well as with the guidelines of standard MSZ EN ISO 19011:2012, applying the requirements therein regarding the system audits of “second parties”. 
2. During the nuclear qualification process, the capability of fulfilling the contractual requirements, thus, the suitability of the subcontractors is examined in respect of each separate subcontract.
3. Paks II. Ltd. shall submit all necessary information to Hungarian Atomic Energy Authority (the Authority) and shall grant the possibility for the Authority to participate in the audits.
4. The validity period of qualifications is at least the same as the period calculated based on the performance date of the contractual obligations as stipulated in the subcontract.  The expiry date is determined taking into consideration the guarantee conditions set out by the subcontract, by supplementing the above-mentioned minimum validity period.

 

The continuous supervision of suppliers qualified by Paks II. Ltd. shall be ensured in accordance with the legal background specified in this letter.
The primary tool for this activity is the conduct of supervision audits during which Paks II. Ltd. inspects the activities of the suppliers on the premises of performing them.  The methods and scope of the inspections depend on whether the specific supplier carries out design, manufacturing, construction and erection or commissioning activities.

Further information on the procurement of the Contractor is available on the website of PIP Ltd.

 

Frequently asked questions:

How to get the right licenses?
During the implementation of the Paks II. project, basically two types of “licenses” (not of procurement, but of a special nuclear nature) are required for the activities:

• suppliers are only entitled to perform activities affecting nuclear safety on the basis of the certification issued by the Licensee (Paks II. Ltd.) (A supplier may perform nuclear safety activities only with the approval of the Licensee, under continuous and competent supervision, see NSC 9.2.2.0600). This qualification process is done by Paks II. Ltd. (or its experts), as described above.
• in special cases required by law, a license (manufacturing, construction, import, etc.) issued by the Hungarian Atomic Energy Authority (HAEA) is required to carry out the activities. The licensee is entitled to submit the license application to the HAEA after examining its content and compliance with the law.

In both cases it is necessary for the supplier to thoroughly understand, interpret and apply the legal requirements applicable to his activity.

What organizations do you need to register with in order to join the project?Under the Engineering, Procurement and Construction (EPC) contract concluded for the realization of the Paks II. investment, the majority of the activities related to the construction of the new units will be performed within the contractual scope of Joint Stock Company Atomstroyexport (ASE JSC). As a result, any organization wishing to join the implementation should pay attention to and apply for the procurement tenders announced on ROSATOM’s procurement portal (zakupki.ru). Regular information on Paks II. related tenders are provided below. Another possibility (especially for smaller entreprises) is to contact the winners of the tenders on the same portal in order to get involved in their work.

What are the financial implications of all these?
There is no fee for the nuclear qualification procedures carried out by Paks II. Ltd. in respect of the suppliers subjected to the qualification process, the company does so at its own expense in order to fulfill the legal obligation as the licensee. The preparation itself, and the preparation and operation of the supplier's management system to meet the specific requirements of a nuclear legislation (even obtaining certificates) may have costs (labor costs of internal resources, purchases of legislations, standards, possible costs of using a consultant).