September 26, 2008

South Korea Opts Out of Bid for Turkish Nuclear Reactor Project

Text of report in English by South Korean news agency Yonhap

[Yonhap headline: "S Korea Opts Not To Bid for Turkish Nuclear Reactor Project" by Lee Joon-seung]

SEOUL, Sept. 26 (Yonhap) - South Korea has opted not to bid for the construction of nuclear reactors in Turkey, citing unfavourable business conditions, a source at the state-run power company said Friday.

The Korea Electric Power Corp. (KEPCO) source, who declined to be identified, said conditions offered by Ankara were too unfavourable to accept.

"Requests by prospective bidders to ease some preconditions were not reflected, making it hard for companies to take part in the bid," the KEPCO insider said.

He said that if Turkey calls for another bid and makes changes to some conditions in the contract, KEPCO will try again to win the deal. At present, only Russia's nuclear power equipment and service export monopoly Atomstroyexport has submitted a bid, which it did earlier in the week.

KEPCO, which had formed a tie-up with Turkey's Enka Group, had hoped to win the deal to showcase its prowess in the atomic energy field.

The power service provider, however, said that because the project calls for an independent power producer (IPP) to construct, own and operate the facilities, there are greater inherent risks compared to power plants that are turned over to the government after completion.

It said that conditions like the operator taking full responsibility for all damages caused by problems at the power plant and the government's reluctance to guarantee payment if users do not pay electricity bills were key issues that had to be resolved.

In addition to the KEPCO-Enka consortium, companies from Canada, China, the United States and Japan, which also expressed interest, did not submit bids.

The deal calls for the building of three or four commercial reactors generating a combined 5,00 megawatt electric (MWe) of power. A commercial reactor usually costs around US$1 billion to build.

Originally published by Yonhap news agency, Seoul, in English 1139 26 Sep 08.

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