EXCLUSIVE: Japan, Turkey to Discuss N-Plant Project Next Month

December 21, 2018

Tokyo--The Japanese government is making final arrangements to hold talks with Turkey in mid-January over a Turkish nuclear power plant project being undertaken by a consortium including Japan's Mitsubishi Heavy Industries Ltd. <7011>, Jiji Press learned Thursday.

Japanese Minister of Economy, Trade and Industry Hiroshige Seko may visit Turkey for discussions with senior officials of the country, sources familiar with the matter said.

Unless the Turkish government accepts the Japanese side's request for measures to improve the profitability of the project, Mitsubishi Heavy and other members of the consortium may decide to pull the plug on the project, according to the sources.

In July, Mitsubishi Heavy submitted a research report on the project to the Turkish side.

The estimated total construction costs have more than doubled from the initially projected level of 2 trillion yen, because stricter safety measures became necessary after the March 2011 triple meltdown at Tokyo Electric Power Company Holdings Inc.'s <9501> tsunami-stricken Fukushima No. 1 nuclear power plant in northeastern Japan.

Mitsubishi Heavy has requested Turkey to take measures to make the project economically rational, such as a hike in the sales price for the electricity to be generated from the project.

During the expected visit next month, Seko is also likely to show Japan's readiness to help Turkey construct a cutting-edge coal-fired thermal power plant, the sources said.

But it appears difficult for Turkey to accept the electricity price hike and other steps sought by the Mitsubishi Heavy side, due to the country's severe economic and fiscal conditions, the sources said.

At a bilateral summit in 2013, Japan and Turkey agreed that the nuclear plant project would be awarded to the Mitsubishi Heavy-linked consortium.

The project calls for the construction of four reactors on the Black Sea coast.

Winning as many nuclear plant orders as possible is a pillar of the infrastructure export strategy of the administration of Japanese Prime Minister Shinzo Abe.

As well as the project in Turkey, however, a nuclear plant project by Japanese electronics and machinery giant Hitachi Ltd. <6501> in Britain is also in doubt due to deteriorating prospects on profitability. Jiji Press