Turkey seeks to resolve dispute over $20 billion nuclear power plant built in Russia

Turkey’s Ministry of Energy and Natural Resources said on Tuesday it was seeking to resolve a dispute between parties involved in the construction of a $20 billion nuclear power plant by Russian nuclear power company Rosatom in Akkuyu , in southern Turkey.

Akkuyu Nükleer, a subsidiary of Rosatom that is building four reactors at the Mediterranean coast site, announced on Saturday that it had signed an agreement with TSM Enerji to undertake the remaining construction work at the plant after terminating an agreement with the Turkish company IC. Içtas.

IC Içtaş on Monday called the decision illegal and said it had filed a lawsuit. He accused Rosatom of trying to “reduce the presence of Turkish companies” on the Akkuyu nuclear power plant project (NPP).

Mersin-based TSM is owned by three Russia-based companies, according to Turkey’s commercial register.

“Our ministry has taken the necessary initiatives to resolve the dispute between the parties,” Turkey’s Ministry of Energy and Natural Resources said in a statement on Tuesday.

“Our priority is to ensure that all contractors and employees who have served on the site since the start of the project have no grievances and that the project is commissioned on time,” he said.

Akkuyu Nükleer did not give a specific reason for terminating the agreement with IC Içtaş, but said that the contract with TSM would ensure that the work would be completed on the agreed dates and that the workers would be paid on time.

IC Içtaş suggested that the move could lead to a delay in the construction process. He said TSM is a limited liability company that does not have the capacity to complete the work.

The company said it would take Rosatom to arbitration in London, as well as domestic legal action in Turkey, according to a statement to Bloomberg News on Monday.

The Turkish government aims to start operating the first reactor at the Akkuyu power plant by mid-2023, the 100th anniversary of the founding of the Republic of Turkey.

The three remaining reactors should come into service by the end of 2026, at the rate of one per year to eventually have a total installed capacity of 4,800 megawatts (MW).

Once completed, the plant is expected to produce up to 10% of domestic electricity needs.

The factory in its current form is one of the largest construction sites in the world.

The plant, which will have an estimated lifespan of 60 years with the possibility of a 20-year extension, will produce carbon-free power 24 hours a day. As a baseload plant, it will play a leading role in reduction of dependence on imported energy resources, in particular natural gas.

The giant project is expected to employ around 15,000 people during its peak construction period and around 4,000 people during its operations.

President Recep Tayyip Erdoğan has previously suggested that Turkey could work with Russia on building two more factories. He is expected to meet with Russian President Vladimir Putin on Friday in the Russian resort of Sochi.

Akkuyu is the world’s first nuclear power plant project implemented under a build-own-operate model. Under the long-term contract, Rosatom has undertaken to design, build, maintain, operate and decommission the plant.

The company holds a 99.2% stake in the project which is estimated to cost around $20 billion (TL 357.98 billion), marking the largest investment in Turkey’s history implemented on a single site.

Rosatom reportedly sent about $5 billion to Akkuyu Nükleer last week. Two more similar dollar transfers are expected within weeks, Bloomberg News reported on Friday, citing senior Turkish officials with direct knowledge of the matter.

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Sharon P. Juarez