Turkey scraps nuclear plant tender

In a brief statement, the state-run electricity wholesaler TETAS said its board of directors decided "unanimously" to cancel the tender, citing an article in the bid specification that gave it the authority to scrap the process without any liability.

A consortium led by Atomstroyexport, Russia's state nuclear giant, had been the only bidder in the tender to build four nuclear reactors with a total capacity of 4,800-megawatts at Akkuyu, in the Mediterranean province of Mersin.

TETAS's decision comes 10 days after a top administrative court suspended parts of the regulation governing the tender before moving on to review a demand by a civil society of engineers to cancel the process.

Energy Minister Taner Yildiz had said at the time that his ministry would not appeal against the court's decision.

He had also added that his ministry would open a new tender for a nuclear reactor at Akkuyu and another at the Black Sea city of Sinop if the current tender was cancelled.

The tender process had been under fire since it emerged that only one consortium had bid for the project and offered an above-market price for supplying electricity to the Turkish grid.

The consortium, which also includes Russia's Inter Rao and Turkey's park Teknik, later revised its unit price of 21.16 cents per kilowatt per hour down to about 15 cents, but Ankara said the new offer was also high.

During a visit to Ankara in August, Russian Prime Minister Vladimir Putin argued the price was below international market levels as he signed a series of energy cooperation deals with Turkey.

Turkey, on the other hand, had said the state could take as much as a 25 percent-stake in the project if the consortium lowered its price further, triggering criticism that such a move would amount to unfair competition.

The tender was held in September, amid global financial market turbulence, with Ankara rejecting requests by interested companies for a postponement.

AECL of Canada, Vinci Construction Grand Projects of France, Itochu Corp. of Japan, China Nuclear Power Components and Germany's RWE were among the companies that had initially picked up bid specifications.

Turkey plans to build three nuclear power plants in hopes of preventing a possible energy shortage and reducing dependence on foreign supplies but the project is fiercely opposed by environmentalists.

Ankara scrapped an earlier plan to build a nuclear plant at Akkuyu in 2000 amid a severe financial crisis and protests from environmentalists in Turkey, Greece and Cyprus.

Critics say Akkuyu is close to a seismic fault line, pointing at a powerful earthquake that killed more than 140 people in the neighbouring province of Adana in 1998.