TURKEY: Government reviews power programme

29 April 1994

Large thermal power station projects are at the centre of a project review forming part of the austerity measures introduced on 5 April by Prime Minister Tansu Ciller. The projects include flue gas desulphurisation (FGD) installation schemes valued at a total of about $985 million. Decisions are expected by the end of May.

Projects being reviewed include a DM 130 million ($76 million) contract for an FGD unit at Yenikoy power station, officials say. Negotiations have been under way between the Turkish Electricity Board (TEK) and Electrim of Poland since early 1993. Electrim built the existing 600-MW plant, which is in operation.

The orders for the FGD units, along with plant expansions, were placed by TEK to cut down on emissions. They are fuelled by the sulphurous and slow-burning lignite mined extensively in Turkey. The contracts were to have been largely financed by external credits.

The orders under review include:

A $505 million order for the Cayirhan scheme signed by TEK in December with a consortium led by Austrian Energy & Environment (AEE - MEED 14:1:94). The consortium also includes Germany's Gottfried Bischoff & Company and Siemens, Japan's Mitsubishi Corporation, and the local Guris. The project involves the installation of two additional 150-MW generating sets along with FGD units.

The $250 million Kangal project, signed in March with a consortium comprising Mitsubishi Corporation, Hungary's Transelektro, locals Gama and Simko, and Germany's Siemens and Koh (MEED 11:3:94). The contract calls for an additional 150-MW boiler and turbine together with an FGD unit for the whole plant, located in Sivas province.

The $85 million Kemerkoy scheme, awarded to Gama in joint venture with the US' Babcock & Wilcox. This called for additional boilers plus an FGD unit.

Bids for the Yatagan thermal power station were under evaluation before the review was announced. A low alternative bid of $66.2 million was submitted to TEK in October by a venture of Japan's Marubeni Corporation with Ishikawajima- Harima Heavy Industries (IHI) and the local Tokar (MEED 29:10:93).

A contract awarded to a venture of Germany's Noell-KRC and the local Alarko valued at about DM 65 million ($38.5 million) in summer 1993 is not affected by the review, Alarko officials say. This is because it will be funded by Germany's Kreditanstalt fuer Wiederaufbau at concessionary rates under an agreement reached in 1992. The other projects were to have been financed by a mix of export and commercial credits. Among the others, the Kemerkoy plant may have most chance of survival, according to industry sources.

Environmental concerns may now be taking second place to expenditure cutbacks. However, energy analysts say that Turkey could experience power cuts by 1987 if no fresh investment is made soon in power station construction.

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