Dear Energy Professional, Dear Colleagues,

On 19th January 2009, Turkish Electricity Trading Public Company declared the long awaited electricity price of the sole bidder in the latest Nuclear power plant proposal.

The consortium, formed by Russia’s state-run Atomstroyexport, Inter RAO and Turkish Park Teknik, offered 20.79 (revised/ updated 21.16) US cents per kWh for the construction and management of Turkey’s first nuclear power plant.

After the bid is opened at the Energy Ministry, Turkey’s state-run power company, TETAS, will assess the submitted price and finalize the tender process. The final decision of TETAS will then be submitted to cabinet for approval. The chairman of the tender commission said the consortium will submit another bid for the price, CNNTurk reported.

Six envelopes were received at the tender, with five of them containing just the customary thank-you letters to the commission and only one offering an actual bid.

Companies that submitted letters of thanks but declined to bid were Atomic Energy Of Canada Limited (Canada), Suez Tractebel (France-Belgium), Unit Investment N.V. (Netherlands), Hattat Holding (Turkey) and Ak Enerji (Turkey).

It is your writer’s sincere feeling that the price is already known upfront by all parties.

Earlier we knew the other price as declared by local Park group in Afsin Elbistan C-unit coal fired thermal power plant proposal. It was 14.70 cents per kwh for first 5 years, and 16.50 cents per kwh afterwards.

In Afsin Elbistan, public company has found that price too expensive and cancelled the tender. It is our wonder how the authority will find more expensive price appropriate in Nuclear tender.

Afsin Elbistan price was the upfront price to be escalated after the plant construction which is 4-5 years ahead of time. In Afsin Elbistan tender, it was open, fair, competitive race for all 30+ interested parties.

Only 2 parties were able to quote for unit-C, and one party in Unit-D. Final price was quite reasonable, award was to be placed but unfortunately it was cancelled.

It is our wonder how the price was found expensive, how the evaluating public authorities were so sure and precise in the final price in 4-5 years ahead of time.

It is our sincere feeling that in Afsin- Elbistan tender, the Private party could be so pleased to learn the tender cancellation since it could be too cheap and risky for them after bids were opened, and they were the sole bidder.

The price which is announced on 19th January 2009 is also the price to be escalated after construction period in electricity generation which is expected to be some 10-15 years ahead of time. Who can precisely be sure the price after 10-15 years ahead of time? Who can know the price of petroleum or natural gas at that time? and who can determine whether it is cheap or expensive? Anyhow it is more expensive that the price in Afsin- Elbistan tender.

We should clearly evaluate why public officials still insist to evaluate rather than cancel the tender, for last 6 months. We should be serious in this tender otherwise we loose credibility.

One more question, who will be responsible to displease our Northern neighbor who also holds the valves which are feeding natural gas to our houses and power plants? Or are we taken hostage/ captive by our Northern neighbor to place the order? Is it a political decision rather than commercial?

Who owns Russian manufactured passenger cars Lada, Volga and Zil in Turkey and happy to run? Your writer was in Moscow last September 2008. He saw that all cars in front of Kremlin were of Audi, BMW and Mercedes.

It is an unfortunate Catch-22 situation, No-win condition -where real choices exist, but no choice leads to success. Your comments are always welcome.

Haluk Direskeneli is a Ankara-based Energy Analyst