Turkish Government May Approve Construction of a Nuclear Power Plant in April

Russian Energy Minister Sergey Shmatko paid an official visit to Ankara to meet with Turkish Energy Minister Hilmi Guler. At the meeting, Shmatko inquired when the Turkish authorities would make their final decision to allow the Russian-Turkish consortium to build Turkey’s first nuclear power plant. Guler said that assessments of the consortium’s bid had reached the final phase (Anadolu Ajansi, March 17). It was reported that the Turkish government would make its final decision after the provincial election on March 29 (www.enerji.gov.tr, March 17). Before the visit the Turkish press speculated that Russian officials were coming to Turkey because of concern that the Turkish government might revoke the bid that was made by the Russian-Turkish consortium (Aksam, March 14).

Like the approval process, the bidding round was quite revealing. In September 2008 13 consortiums applied to build Turkey’s first nuclear power plant in the Akkuyu district of Mersin Province on the Mediterranean coast. On the day the bids were due, however, five consortiums sent thank you notes and withdrew from the bidding. Only the Russian-Turkish consortium Atomstroyexport-Inter Rao-Park Teknik made an offer (Milliyet, September 24, 2008). The Turkish Energy Ministry accepted the bid and started negotiating the details with the consortium, which is planning to build "four Russian VVER-1200 pressurized water reactors that generate 1,200 megawatts of electricity each" (Hurriyet Daily News, January 20).

The Turkish government wants either a 3,000 or a 5,000 MV four-unit power plant to be built by the end of 2020. The RIA-Novosti news agency reported that the Russian-Turkish consortium wants to complete the 4,800-megabyte nuclear power plant by the end of 2012 (www.turkrus.com, March 17). The Turkish government has agreed to buy electricity from the plant for 15 years. According to estimates, Turkey will pay $86.3 billion for 415.5 billion kilowatt-hours (kWh) throughout this period (see EDM, January 26). The cost of the power plant is expected to be around $10 billion (CNNTurk, September 25, 2008).

The final issue to be discussed is pricing. The consortium had offered Turkey a price of 21.16 cents per kWh for the electricity. Experts found this price almost four times higher than the current rates in the Turkish market, which vary from 4 to 14 cents (see EDM, January 26). The Turkish press had speculated that the price range would be between 12 and 15 cents (Sabah, January 19). Prices in various other countries are much lower. The price per kWh for nuclear energy in the United States, for example, is about 4.65 cents, in Germany 3.93 cents, in France 3.93 cents, in the Czech Republic 3.17 cents, and in Holland 5.32 cents (Taraf, February 11).

In order to reduce the price, the state-run Turkish Electricity Trading and Contracting Company evaluated the proposal and the Turkish side demanded a reduction. The consortium reduced its price to 13.4 cents, but Turkey wants it lowered to about 8 to 10 cents (Taraf, February 11).

The consortium is doing everything it can to convince the government to accept the offer. While Shmatko has been lobbying on behalf of the Russian companies, the Turkish side of the consortium, the Ciner Group, has also increased its efforts. On March 1 Ciner Media, a part of the Ciner Group, started publishing a new daily, Haber Turk, which was expected to pursue a policy opposed to the government. Surprisingly, however, the Ciner Media group has taken pro-government positions since the beginning. Haber Turk has run an analysis of the Turkish economy, for example, alleging that there is no economic crisis in Turkey (Haber Turk, March 14). Even pro-Islamist dailies have not tried to deny the economic crisis. Furthermore, the Ciner Group invited Prime Minister Recep Tayyip Erdogan and Minister Guler to the ribbon-cutting ceremony for one of its companies, and Ciner Media outlets broadcast the ceremony live (Haber Turk, March 18). In addition, a Haber Turk editor was fired for writing a book questioning the government’s possible involvement in corruption (www.medyatava.com, March 18). Given that Erdogan has been quarrelling with Turkey’s largest media group, Dogan Media, such support from Ciner Media could be a valuable asset on the eve of the March 29 provincial elections.

From Guler’s tone after his meeting with his Russian counterpart and Ciner Media’s unexpected support for the government, one can assume that an agreement has been reached between the Russian-Turkish consortium and government. Dogan Media, however, considers the government and the Ciner Group as its economic enemies and will probably direct its attention to the nuclear energy deal when it is announced. Furthermore, because only one company came with an offer and there was no actual bidding process, which is a legal requirement, the Council of State could declare the arrangement unlawful.