TURKEY: Controversial power plant projects make progress

15 September 1995

Two power plant projects which have excited controversy for different reasons are moving forward. A contract is expected soon for a 1,400-MW plant near Bursa, while construction tenders may be invited in December for the country's first nuclear power station.

A Japanese-led consortium grouping Mitsubishi Heavy Industries, Mitsubishi Corporation, Itochu Corporation and the local Enka is favourite to sign a contract soon for the construction of the gas-fired, combined-cycle power station near Bursa, industry sources say (MEED 9:6:95; 21:4:95). The order will be entirely financed by supplier credits.

The consortium returned the lowest bid of around $470 million out of five offers to the Turkish Electricity Generation & Transmission Corporation (TEAS) earlier this year. The plant is urgently needed for the Bursa area, the centre of the country's automotive industry, which at present has a generating deficit of around 800 MW.

However, some controversy developed in the summer over the low bid. An Ankara MP, Bulent Akarcali, asked why the venture's bid was less than half the $924 million price it originally sought in direct negotiations for the project last year. He said the group's low bid this year was $370 million.

Mitsubishi officials in Ankara said that the consortium had offered $470 million this time around compared with a previous price of $860 million last year, according to press reports. They also claimed the difference in prices stemmed from diminishing costs in the energy sector.

But industry sources say the prices at least seem to vindicate the cancellation of direct negotiations with the Mitsubishi venture by TEAS, in the belief that a price obtained through competitive bidding would be cheaper.

The venture's direct proposal last year included an offer of 60 per cent financing by The Export-Import Bank of Japan (Jeximbank). After a visit by Prime Minister Tansu Ciller to Tokyo in late February and early March, Jeximbank renewed its funding offer should the Bursa plant be awarded to a Japanese company.

TEAS also plans to invite construction bids in December for a proposed nuclear power station at Akkuyu on the southern Mediterranean coast. The tender invitation will seek offers and technologies for plant of between 600-1,400 MW, say industry sources.

However, environmental protest is growing against the project, particularly from local municipalities.

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