Sole bidder’s offer puts energy tender at stake
Güncelleme Tarihi:
by Begüm Gürsoy - Referens
Oluşturulma Tarihi: Ocak 20, 2009 00:00
ANKARA - The tender process for Turkey’s first nuclear plant faced economic and legal difficulties yesterday, as the sole bidder, a consortium led by Russia’s Atomstroyexport, issued an offer nothing short of a cold shower for the government that is trying to cut energy costs. If accepted, the offer of 21.16 cents for one-kilowatt per hour (kwh) will constitutes "the world’s most expensive electricity" generated at a nuclear plant.
The consortium submitted a new offer minutes after the tender commission announced the first proposal. According to experts, the world average of the cost of one-kwh electricity produced at nuclear plants is between the range of 10-15 cents.
"The company has conveyed to us a revised price which they said was linked to economic developments in the world," Energy Minister Hilmi Güler said at a press conference, adding that the new bid had not been opened. TETAŞ, the state company that will eventually market the plant’s power production, will open the revision letter, assess it and pass it on to the cabinet for a final approval, the minister added.
"We’ve revised our offer because the economic conditions have changed," said Timur Ivanov, deputy chairman of the Russian company, without giving details. "There is room for bargaining," Güler added, refusing to comment on the initial offer of the consortium. The consortium, which also includes Turkey's Park Teknik, was the sole bidder in the tender launched in September to build a 4,800-megawatt nuclear power plant at Akkuyu, in Mersin province on the Mediterranean coast.
Experts speak
The offer by the consortium is seen highly expensive, according to experts. Haluk Direskeneli, a member of the Chamber of Mechanical Engineers, recalled that Park Group’s offer of 14.70 cents per kilowatt per hour (kwh) for the first five years in Afşin-Elbistan C-unit coal fired thermal power plant tender was found high and was cancelled.
"In Afşin-Elbistan, the price was found to be too expensive and the tender was cancelled. It is our wonder how the authority will find this more expensive price appropriate," Direskeneli wrote for Journal of Turkish Weekly yesterday. He also claimed that even this price would rise during the construction period.
If the government approves the consortium’s offer, Turkey will have to pay a total of $86.3 billion for 415.5 billion kwh, in 15 years.
Submission of a new offer has also caused a legal debate. According to tender rules, the bidders are not allowed to make revisions on their offers. But Güler said as there is only one bidder, there was still a chance to bargain with the consortium on the price. In contradiction with Güler’s statement, sector representatives underlined that "renewing the proposal was not legal."
"We are considering to take the tender to the court to annul it," Hüseyin Önder, board member of the Chamber of the Electric Engineers, told business daily Referans. "As there is only one offer, there emerges the question of legality on what criterion the offered price will be evaluated," Önder stated.
According to tender rules, the tender commission has to submit its evaluation of the offer to the cabinet, which will give the final decision. However, as the consortium renewed its offer, it’s not sure whether the commission will open the new envelope. Another possibility is that the cabinet will approve the first offer, but will start negotiations to decrease the price before the final agreement is signed.
"The company has conveyed to us a revised price which they said was linked to economic developments in the world," Energy Minister Hilmi Güler said at a press conference, adding that the new bid had not been opened. TETAŞ, the state company that will eventually market the plant’s power production, will open the revision letter, assess it and pass it on to the cabinet for a final approval, the minister added.
"We’ve revised our offer because the economic conditions have changed," said Timur Ivanov, deputy chairman of the Russian company, without giving details. "There is room for bargaining," Güler added, refusing to comment on the initial offer of the consortium. The consortium, which also includes Turkey's Park Teknik, was the sole bidder in the tender launched in September to build a 4,800-megawatt nuclear power plant at Akkuyu, in Mersin province on the Mediterranean coast.
Experts speak
The offer by the consortium is seen highly expensive, according to experts. Haluk Direskeneli, a member of the Chamber of Mechanical Engineers, recalled that Park Group’s offer of 14.70 cents per kilowatt per hour (kwh) for the first five years in Afşin-Elbistan C-unit coal fired thermal power plant tender was found high and was cancelled.
"In Afşin-Elbistan, the price was found to be too expensive and the tender was cancelled. It is our wonder how the authority will find this more expensive price appropriate," Direskeneli wrote for Journal of Turkish Weekly yesterday. He also claimed that even this price would rise during the construction period.
If the government approves the consortium’s offer, Turkey will have to pay a total of $86.3 billion for 415.5 billion kwh, in 15 years.
Submission of a new offer has also caused a legal debate. According to tender rules, the bidders are not allowed to make revisions on their offers. But Güler said as there is only one bidder, there was still a chance to bargain with the consortium on the price. In contradiction with Güler’s statement, sector representatives underlined that "renewing the proposal was not legal."
"We are considering to take the tender to the court to annul it," Hüseyin Önder, board member of the Chamber of the Electric Engineers, told business daily Referans. "As there is only one offer, there emerges the question of legality on what criterion the offered price will be evaluated," Önder stated.
According to tender rules, the tender commission has to submit its evaluation of the offer to the cabinet, which will give the final decision. However, as the consortium renewed its offer, it’s not sure whether the commission will open the new envelope. Another possibility is that the cabinet will approve the first offer, but will start negotiations to decrease the price before the final agreement is signed.