Publication: Eurasia Daily Monitor Volume: 5 Issue: 195

On October 9 Turkish Energy Minister Hilmi Guler predicted that the evaluation of the winning bid in Turkey’s first nuclear power plant tender at Akkuyu on Turkey’s Mediterranean coast would be completed by the end of October. He added that the government was currently working on the details of the contract to build a second nuclear power plant near the Black Sea port of Sinop, which he expected to be put out to tender by the end of the year (CNNTurk, October 9).

After the contract for the construction of the Akkuyu plant was first put out to tender in March, a total of 13 consortiums purchased documents. Almost all expressed reservations about the project, however, not least about the terms of the state guarantee to buy electricity for the first 15 years of the plant’s operating life. Several wrote to the Justice and Development Party (AKP) government asking for an extension of the bid deadline of September 24 so that their reservations could be addressed and resolved. But Prime Minister Tayyip Erdogan refused, arguing that Turkey had already waited too long for nuclear power and could not afford the luxury of a postponement (Anadolu Ajansi, September 22). As a result, only one consortium, a joint venture between the state-owned Atomstroyexport of Russia and the Turkish Ciner Group, submitted a bid (see EDM, September 25).

On September 25, the technical details of the Atomstroyexport bid were forwarded to the Turkish Atomic Energy Authority (TAEK) to be assessed for compliance with the project’s safety standards. If TAEK approves the bid, it will be presented to the Council of Ministers for ratification.

In contrast to almost every observer, including members of his own ministry, Guler dismissed suggestions that receiving only bid in the Akkuyu tender constituted a failure. “We weren’t disappointed,” Guler insisted. “There were claims that there wouldn’t be any bids at all” (Anadolu Ajansi, October 9).

Although the technical details of the Atomstroyexport bid have not been released, there have been concerns about both its safety and strategic implications. Turkey already receives almost two-thirds of its natural gas and about one-third of its oil from Russia (see EDM, September 9). The United States in particular was frustrated by Ankara’s less than wholehearted response to Washington’s calls for unity and cooperation in confronting Moscow following the outbreak of the war with Georgia in August. Its concerns have hardly been assuaged by the prospect of a state-owned Russian firm building Turkey’s first nuclear power plant and locking Ankara even more tightly into dependence on Moscow for its energy requirements.

There has been no indication that Guler shares these concerns. “The evaluation of the bid is up to TAEK,” said Guler:

“The process won’t last long. It will be finished before the end of October. We know Russian technology. We shall see what they have proposed after TAEK’s evaluation. If they have proposed the latest technology, then the evaluation will be different. Even if we give our approval, it will be the Council of Ministers that has the final word” (Anadolu Ajansi, October 9).

In what was presumably intended as a statement of reassurance, Guler then announced that if the Atomstroyexport bid were not approved, the contract would simply be put back out to tender on the same terms (CNNTurk, October 9). He did not explain how his relaxed demeanor at such a delay conformed to Erdogan’s previous insistence that there was no time to lose or why consortiums that had reasons not to bid for the first tender would submit bids for a second identical one.

Nor did Guler provide any details of, or precise date for, the proposed contract to build a nuclear power plant at Sinop (CNNTurk, October 9). Guler did appear, however, to realize that the continuing global financial meltdown was likely to make it more difficult for investors to find the necessary financing for large-scale energy projects.

“The global financial crisis will affect large investments,” admitted Guler. “So far it hasn’t had any noticeable impact, but we are still in the early stages of the crisis” (CNNTurk, October 9).

Guler’s excessively sanguine appraisal of the prospects for the Akkuyu nuclear power plant contract will have done little to reassure his critics, not least in the Energy Ministry itself, where he has already lost the confidence of many bureaucrats. Guler’s statements will also have reinforced doubts about the AKP’s energy policies as a whole.

According to projections by the state-owned Turkish Electricity Transmission Company (TEIAS), if the Turkish economy grows in line with government projections, demand for electricity could exceed supply as early 2009, although a slower pace of economic growth could result in the shortfall being postponed until 2011 (TEIAS website, www.teias.gov.tr).

Unlike Guler, the rest of the AKP government appears oblivious to the threat posed to the Turkish economy by the global financial crisis. On October 9 Arzuhan Yalcindag, the head of the Turkish Industrialists’ and Businesspersons’ Association (TUSIAD), issued a statement expressing what she described as the association’s “concern” about the global crisis and called on the AKP government to take preventative measures.

“No one can say that the global turmoil will not affect Turkey,” said Yalcindag (Radikal, Milliyet, Hurriyet, Vatan, Dunya, October 10); but Deputy Prime Minister Nazim Ekren told Yalcindag to keep her concerns to herself. “We should avoid being negative,” Ekren said. “The time to be concerned is when there is an approach that will lay the ground for an increase in costs” (Radikal, Referans, October 10).

“The government is confident the economy is sound,” Industry Minister Zafer Caglayan blithely added (Anadolu Ajansi, October 9).