Turkey to decide about its first nuclear reactor

Publish date: January 29, 2009

Russia's Atomstroiexport, the only bidder in a tender to build Turkey's first nuclear plant, has revised its bid after initially offering to sell power at three times the current rate, Turkey's Energy Minister said on January 19th.

Energy Minister Himli Guler told reporters that state power company Tetas was preparing a report on the revised offer from Atomstroiexport, which won the nuclear power licence tender with Turkish partner Park Teknik and Russia’s Inter. Atomstroiexport had offered to sell power at an average price of $0.2116 per kilowatt hour, Yasar Cakmak, head of state power company Tetas, told a news conference.

The average wholesale price in Turkey is about $0.079 per kilowatt hour. Atomstroiexport’s bid would include covering its construction costs and a forecast for power prices over the life of the station, which could cost as much as $8 billion to build.Turkey wants to build three nuclear plants to cover about 5 percent of the country’s electricity needs and cut its reliance on energy imports. Its demand has been growing at a rate second only to China’s. Environmentalists and some economists say nuclear power is too expensive and could create health hazards in a country crisscrossed by earthquake faultlines.

The government took nearly three months to approve the Atomstroiexport bid after no other companies submitted bids in the September tender. It has pledged to revamp a nuclear-tender law to attract more interest before it holds other tenders. Guler also said the government was preparing draft legislation that would allow for a second nuclear tender for a site along Turkey’s Black Sea coast in the north.

Submission of a new offer has also caused a legal debate. According to tender rules, the bidders are not allowed to make revisions on their offers. But Güler said as there is only one bidder, there was still a chance to bargain with the consortium on the price. In contradiction with Güler’s statement, sector representatives underlined that "renewing the proposal was not legal." "We are considering to take the tender to the court to annul it," Hüseyin Önder, board member of the Chamber of the Electric Engineers, told business daily Referans. "As there is only one offer, there emerges the question of legality on what criterion the offered price will be evaluated," Önder stated. According to tender rules, the tender commission has to submit its evaluation of the offer to the cabinet, which will give the final decision. However, as the consortium renewed its offer, it’s not sure whether the commission will open the new envelope. Another possibility is that the cabinet will approve the first offer, but will start negotiations to decrease the price before the final agreement is signed.

Atomstroiexport’s licence is to build a power station on Turkey’s southern, Mediterranean coast that will have a capacity of about 3,000 to 5,000 megawatts, Reuters reported.