Hungary's National Atomic Energy Authority (OAH) has ordered a partial halt to construction at the Paks II nuclear power plant (NPP) after a section of the southern wall of the excavation pit collapsed, local media reported on February 7.

The collapse caused a vertical displacement of more than seven metres in the affected area of the future fifth block of the power plant. The authority is also assessing whether external mechanical factors played a role in the incident, which did not affect nuclear safety, it said, adding that groundwork can continue in other parts of the area. The nuclear watchdog is set to start an inquiry.

Independent MP Akos Hadhazy, an outspoken critic of the government, reported weeks earlier that one of the Russian contractors, Orgenergostroy, which has been working in the affected area, had begun mass layoffs, citing adverse economic conditions.

Workers had complained of frequent delays in salary payments and poor working conditions. The Russian company had amassed huge debt, according to the MP, who claimed that authorities misled the public for weeks about the stability of the Paks II construction site.

The expansion of Hungary's sole NPP has been a contentious issue from the outset.

Hungary selected Rosatom without a public tender based on a 2014 intergovernmental agreement to build two VVER-1200 reactors, each with a capacity of 1,200 MW, making it the largest nuclear project in the EU with a building permit.

The project has faced significant delays due to regulatory reviews, safety assessments, and European Commission investigations, pushing the original start date from 2017. Even if the current timeline is met, the new blocks could only become operational in the early 2030s.

OAH granted the final implementation licence for the project in late 2024, two and a half years after granting a conditional permit. This meant that Paks II, the company overseeing the project, could only proceed with foundation work at its own risk.

The preparatory phase of the project, including excavation and site preparation, began in 2021, and the first concrete pour for the new reactors is scheduled for early 2025.

The project also faces significant financial challenges due to potential cost overruns. The 2014 agreement established a €12.5bn budget, primarily financed by a €10bn Russian loan, with Rosatom bearing the risk of cost increases. However, the government has recently introduced a parliamentary amendment that would allow Paks II to revise its contract with Rosatom, potentially increasing the project's overall budget.