TOKYO -- Japan is expected to effectively withdraw its plans to build a nuclear power plant in Turkey by asking Ankara to inject a significantly larger amount of funds amid ballooning safety costs -- a demand Turkey is likely to reject -- according to people familiar with the decision.
The Japanese government decided to ask for the increased coverage by Turkey as a final condition for constructing the plant. Under the current proposal, the plant is to be built by ATMEA, a joint venture of Japan's Mitsubishi Heavy Industries Ltd. (MHI) and French nuclear plant maker Framatome, near the Black Sea coastal town of Sinop in northern Turkey.
Besides the Turkish project, another plan to export nuclear power reactors to Britain by Hitachi Ltd. also faces difficulties. If both plans fail, a growth drive strategy of the administration of Prime Minister Shinzo Abe will collapse.
The Turkish project has its roots in a 2013 joint declaration for cooperation over the construction of nuclear power plants signed by Prime Minister Abe and then Turkish Prime Minister Recep Tayyip Erdogan. Under the original plan, four medium-sized ATMEA1 reactors would be built for the start of operation in 2023.
However, the total cost estimate conducted in July 2018 by MHI for the project more than doubled from the original projection of some 2.1 trillion yen to around 5 trillion yen. The price hike occurred amid rising safety costs following the 2011 triple core meltdowns that hit the Tokyo Electric Power Co.'s Fukushima Daiichi Nuclear Power Station, as well as the finding of an active fault near the Sinop site. In addition, the Turkish lira has gone down since the summer of 2018, eroding the project's profitability further. Tokyo therefore decided to increase the sale price of electricity to be generated by the new nuclear power station in a bid to recover project costs.
It is expected to be difficult for Ankara to accept the new condition, because it would mean the Turkish people would have to shoulder a greater financial burden. Japan and Turkey will effectively discuss how to arrange Japan's departure from the project. In a bid to sustain their bilateral relationship, the Japanese government and MHI plan to propose to Turkey provision of high efficiency coal-fired power production technologies and other offers.
Meanwhile, Hitachi, which also manufactures nuclear reactors, has acknowledged that it faces difficulties in completing a project to build two nuclear reactors in Britain. Chairman Hiroaki Nakanishi of the company told reporters in December that he informed the British government that the plan was "at a limit" due to a surge in project costs.
Both the Turkish and British projects have been pitched directly by Prime Minister Abe, but those once promising plans now appear to be falling apart.
(Japanese original by Ryo Yanagisawa and Takayuki Hakamada, Business News Department)