Companies offer new proposals in Turkish nuclear bid

["Sandy Perle" <sandyfl@earthlink.net>]

Companies offer new proposals in Turkish nuclear bid

ISTANBUL, June 14 (Reuters) - Two of the three firms bidding in 
Turkey's long-delayed nuclear power plant project have offered new 
proposals to win the race to overcome the treasury's resistance over 
finance guarantees to the project. 

U.S.-Japanese Westinghouse Electric-Mitsubishi and Canada's AECL-led 
consortia have submitted their additional proposals as they entered 
the home strecth with the third competitor Franco-German NPI. 

Turkey's electricity authority TEAS collected original bids from the 
three consortia in 1997 for the controversial project, to be located 
in southern coast of Akkuyu and opposed by residents, some 
politicians and environmentalists. 

Ankara has since delayed the tender for eight times with the last 
extension being to July 24. 

"We have proposed to build the first unit of 670-MegaWatts (MW) in 
our two-unit system without treasury guarantees," said a 
representative for AECL. 

"When we begin building the second unit in 2002-2004 we will then 
seek treasury guarantees for $2-$2.5 billion and the treasury will 
probably be in a comfortable position regarding its financial 
balance," he said. 

HITCH OVER TREASURY GUARANTEES 

Despite the government's go-ahead, the treasury, a chief actor in a 
three-year International Monetary Fund standby deal aimed at cutting 
inflation, said in April it could not provide guarantees for the 
project, to cost up to $4.5 billion. 

All government projects involding foreign financing are required to 
have a treasury gurantee for credit packages. 

But a Westinghouse Electric representative said the consortium had 
given up on the guarantee condition of the tender term. "Our proposal 
includes relinquinshing from the treasury guarantee condition," she 
said. 

"What we now say is to initially have TEAS open a facility of $100 
million to begin basic work like training and site developement. 
Later we carry out the entire project without the guarantee. That is 
a great sacrifice on our part." 

Selahattin Hakman, a senior engineer from Siemens <SIEGn.DE> which is 
50-50 partner in NPI with France's Framatome <SOUR.PA>, said his 
consortium would not offer new proposals and added forsaking treasury 
guarantees for the project would require a renewal of the tender. 

"The project cannot be carried out without treasury guarantees. This 
would change all conditions in the original bids and affect the cost 
of credit packages," he said. 

Hakman said negotiations including the credit package and detailed 
engineering work with the winner of the project would take two to 
three years. "Therefore we will not need any treasury guarantee until 
early 2003 anyway." 

Westinghouse Electric representative said the consortium would not 
agree to another extension if TEAS makes another demand, but both NPI 
and AECL officials said they were likely to agree. 

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Sandy Perle					Tel:(714) 545-0100 / (800) 548-5100   				    	
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