Turkish nuclear plant eases forward
By Emrullah Uslu
Russian Prime Minister Vladimir Putin's visit to Ankara for talks with his
Turkish counterpart Recep Tayyip Erdogan in early August secured some 20
agreements covering energy, trade and other fields. Consequently, Ankara has
made its most immediate priority to lift the regulation requiring the full
inspection of Turkish goods at customs gates.
Russia put strict procedures in place against Turkish exporters in August 2008.
The implementation of those rules, combined with the impact of the global
economic crisis, caused Turkish exports to Russia to fall by 58% so far in
2009. However, Moscow prioritized Turkey's first nuclear power plant tender,
which was awarded to a Russian-Turkish consortium. As the original price
was too high, the tender has long-awaited cabinet approval. Meanwhile, the
Russian side lowered the price, and offered a compromise.
Regarding easing the inspection of Turkish goods at customs, Turkish state
minister Hayati Yazici revealed that, "Russian authorities have annulled the
regulation requiring the full inspection of Turkish goods at customs gates".
The decision to annul the regulation will have greater implications beyond
Turkish-Russian trade in textile or agriculture.
Knowing that Russia insists on involvement in the nuclear power plant
construction, its decision to ease restrictions on Turkish goods may well be
related to Ankara's decision to find a new way of helping the Turkish-Russian
consortium. Regarding the tender, Energy and Natural Resources Minister Taner
Yildiz has stated he is dissatisfied with the price submitted by the
Turkish-Russian consortium in January - a bid of 21.16 US cents per kilowatt
hour (kwh), was adjusted to 15.35 cents in early February in an attempt to
prevent its bid from collapsing.
It seems that, despite its dissatisfaction, Ankara is exploring ways to reduce
the price of nuclear energy. Recently, Yildiz said that the Turkish state could
take as much as a 25% stake in the plant if the company lowers the price. The
suggestion, however, drew intense criticism, since it was not included in the
original bid specifications. Meanwhile, the media has raised questions over
whether modifying the financial terms will amount to unfair competition, as
other companies might have wanted to participate under such conditions.
Yildiz insists on the issue of the Turkish state share. In response to
continued criticism he responded: "Let us examine the issue either from a
proactive or pragmatic perspective. If the public share, whether it is 15% or
25% and whether it is at the beginning or at the end of the tender, is causing
the price to fall - it is an important factor. If some risks are to be
eliminated with the public share, then I have to adopt it for the sake of my
country's interests."
Yildiz has long advocated a public share in nuclear energy. As early as 2007,
he suggested that private companies are averse to investing in nuclear energy
without having a certain level of public share. He believes that it is
necessary for inexpensive energy prices.
Since Yildiz became the energy minister, he has attempted to insert the public
share into the nuclear energy bidding process. Energy experts interpret his
public share argument as an attempt to lower the price by reducing the risk to
the Turkish-Russian consortium bid. The major obstacle, however, is the Turkish
judiciary, which would not allow changing the pre-existing conditions of the
bidding process in order to reduce to cost of nuclear energy. In addition to
their ideological opposition to the AKP government, most of these judges have a
tendency to oppose nuclear energy. Yildiz, on the other hand, argues that a
public share is legal, and that it is unnecessary to cancel the bidding process
if the public share is considered as a way of reducing the price of nuclear
energy.
Analyzing the strategies of the Turkish company Park Energy, which won the
nuclear energy bid, it wants to maintain good relations with the AKP
government. The company is part of Ciner Group, which has interests in
television, newspapers, magazines and the film industry. It uses its media
outlets to fully support the government's domestic and foreign policies. Unless
rival companies, which initially wanted to enter the bidding process but
because of high risk factors withdrew, generate international and domestic
support against the "public share", it is likely that the Turkish-Russian
company will be declared as the final winner in the bidding process. [1]
Editor's note: 1. The Russian side of the consortium includes
Atomstroyexport, the Russian Federation's nuclear power equipment and service
export monopoly, and Moscow-based utility OAO Inter RAO UES, according to a
Bloomberg report.
Emrullah Uslu is a Turkish terrorism expert and currently a PhD candidate
at the Center for Middle Eastern Studies at the University of Utah. He worked
as a policy analyst for the Turkish National Police's counter-terrorism
headquarters for more than six years. Mr. Uslu has taught courses on terrorism
and political violence. Mr. Uslu regularly contributes to the Istanbul-based
English daily Today's Zaman and Turkish daily Taraf.
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