$20 billion nuclear market awaits in Turkey

ANKARA, TURKEY - Turkey is preparing to hold another tender for the construction and operation of the countryÂ’s first nuclear power plant after canceling the last one.

Several corporations from the United States, South Korea, France and China as well as Canada, Russia and Japan are showing keen interest in the new tender.

The Turkish Electricity Trading and Contracting Company (TETAS) held the tender for the construction and first 15 years of operation of the nuclear power plant on September 24, 2008, which a consortium composed of Russian companies Atomstroyexport and Inter RAO UES and the Ciner GroupÂ’s Park Teknik won as the sole bidder.

The Turkish Atomic Energy Agency (TAEK) approved the technical aspects of the consortiumÂ’s bid and sent the bid for the CabinetÂ’s evaluation. The Cabinet sent its opinion to TETAS, which announced that it canceled the tender on November 20.

The decision to cancel the tender was no surprise as it was already in jeopardy due to a recent verdict by the Council of State which ruled the tender legally invalid over issues such as power prices. Upon intense criticism over the high price of the bid, the consortium lowered its offer. Their new price was $0.134-$0.154 per kilowatt hour (kWh), 27 percent lower than its original bid but still approximately double the current rates.

After Energy and Natural Resources Minister Taner Yildiz declared that they will start over with TurkeyÂ’s dreams of having a nuclear power station, the ministry decided to launch another tender in March 2010.

U.S. giant General Electric (GE) was the first to show interest in the tender as the companyÂ’s officials informed Turkish authorities of their goal during Prime Minister Recep Tayyip ErdoganÂ’s recent visit to the U.S. GEÂ’s Turkish partner, GAMA, is known to be lobbying on behalf its U.S. partner and has already announced that it will partner with GE for the tender.

Korea Electric Power Corp. (KEPCO) of South Korea is another company that made manifest its intention to place a bid for TurkeyÂ’s nuclear power plant by sending one of its top executives to Turkey on December 28.

KEPCO executive Ricardo Cordoba announced that they will enter the tender and they are warm to the idea of having 25 or 30 percent public shares in the plant. The shareholding structure proposed by the company may make its bid attractive to Turkish authorities. It is also offering to establish a research and development (R&D) center in Turkey.

Another South Korean company aspiring to bid for the Turkish nuclear power plant is SK, which has already proved itself by winning the Marmaray project in Turkey. Its vice-president, Seok Jaes Seo, recently visited Turkey to have important talks at the Transportation Ministry and the Energy Ministry.

French corporations will not have much luck in the TurkeyÂ’s new nuclear tender as French President Nicholas Sarkozy is openly opposed to TurkeyÂ’s EU membership and, in response, Turkey has been quietly eliminating French companies from bidding for tenders in Turkey.

Japanese companies, too, are showing interest in the tender with both Toshiba and the Itochu Corporation likely to enter the tender. Japanese companies may have more advantages as 2010 is the “Year of Japan” in Turkey. The Japanese foreign minister visited Turkey in early January and is said to be showing intense interest in the tender.

Another world giant that is likely to bid for the nuclear tender is China Nuclear Power Components Co. Although it had showed significant interest in the previous tender, it did not submit a bid for it. Whether Russian Atomstroyexport, the winner of the previous tender, will bid for the new tender is unknown but Russian natural gas giant Gazprom is closely monitoring the developments.

Canadian Atomic Energy of Canada Limited (AECL), French-Belgian consortium Suez Tractebel, Dutch Unit Investment N.V, and German RWE entered the previous tender, but submitted empty bids. They are known to be following the developments concerning the new tender and they have been holding talks with Turkish companies Zorlu, AK Enerji, Sabancı Holding, Koç Holding, Sanko, Alsim Alarko, Park Teknik, and the Çalık Group on the possibilities for bidding in a consortium.