Chairman of Ciner Group, said that nuclear power plant investment whose offer was given to be realized commonly with the Russians will provide foreign capital inflow of 18 billion dollars. Ciner stated that “The investment whose construction will continue for 7 years will make contribution of 0,3 percent each year for development of Turkey”.
Turgay Ciner, Chairman of the Board of Ciner Group, said that nuclear power plant investment to be realized commonly with the Russians will provide foreign capital inflow of 18 billion dollars for Turkey.
Turgay Ciner summarized participation of the investment to Turkish economy as follows: “Here, Russians are big partners. This investment is in Turkey. Foreign capital of 18 billion dollars will enter to Turkey within 7 years. This corresponds to 2,5 billion dollars per year in average. This money will remain in Turkey”.
The investment is in Turkey. Minimum 8-9 billion dollars of this investment will be made with the raw material to be supplied from Turkey. Think, more irons of 1 billion dollar will be sold per year, cement will be sold. Minimum 3 people will work in construction. This means growth of 0,3 percent of Turkey only due to this investment during 7 years. With only one investment. If Turkey will become smaller by 3 percent this year, it will become smaller by 2,7 thanks to this investment.
What happens it if is canceled? Above all, this investment cannot be made. Foreign capital inflow of 18 billion dollars should not be in Turkey within 7 years. This foreign capital does not sell the existing; it is hundred percent new investment”. Turgay Ciner answered questions of HABERTÜRK regarding nuclear power plant investments and other investments in energy sector.
Mr. Turgay, the entire business world is keeping an eye on you in Turkey since you joined Nuclear power plant tender with your Russian partners. Lots of criticisms were made due to the fact that only one Company attended the tender at the beginning. In your opinion, is it objectionable that only one Company attended?
I want to start speaking by correcting very general mistake that everyone makes. No tender is in question for nuclear power plant. No tender is made here. Conditions of a normal tender are not valid for competition about nuclear power plant construction. Nuclear power plant construction has its own law. This is a competition made among the Companies for nuclear power plant investment within the frame of this law. This is not a tender. For this reason, it will not be referred as a tender. This is a special case. I should answer your question with reference to truth that this is not a tender but a competition. This competition was definite long time ago. Many Companies received specification. In other words, many Companies wanted to attend the competition. However, only our Company gave offer. What can we do? They did not give any offer.
Then, why did not other Companies give an offer? Were competition conditions severe or was duration limited?
I do not think that there is a problem about the duration. This competition had been planned for a long time. If you look at majority of the number receiving specification, there is no problem regarding duration. And regarding the conditions, I do not know what other think, but we attended this competition with the same conditions as others, and gave offer.
Why did not others give offer?
They should be asked this question not to me. In truth, This is my opinion. This competition is not suitable for businessmen who got used to do business in Turkey. You make investment of approximately 18 billion dollars during 7 years. Then you will take back this cent by cent. You will provide its financing. You will perform its management. A work for a long time. We always did such businesses. Our soda ash investment took 11 years. We established power plants in Silopi. A business lasted many years. Energy works are such investments. There is fixed price condition in this competition. In other words, you will calculate your costs in 2030 already now and give price accordingly. I think these factors prevented others to attend this competition. An investment of 18 billion dollars is not easy. There is no example in the world. Others may avoid due to investment size.
Construction will take 7 years, business 15 years, what is investment cost?
Energy investment costs are standard in the world. Investment is approximately 4 million dollars per megawatt in nuclear.
Since the power plant to be built here will be 4500 megawatts, when 4500 is multiplied, the amount is 4 million dollars. This corresponds to approximately 18 billion dollars. Period of this investment is 7 years. You will make investment of 18 billion dollars during seven years. There is no return at that point. You will make production after 7 years and take this back cent by cent.
For how many years?
Construction will take 7 years, business 15 years. In 22 years. We reduced the price when costs were decreased.
The first price given by your consortium was around 20 cents. However, then you gave a revised offer, and you decreased the price to around 15 cents.
15,2 cents. Yes, we decreased it. Should not have been we decreased the price? It had been 1 year that we gave the offer. World economy was not like this. Crisis occurred within elapsed time.
The crisis has no benefit for anyone! Did not costs increase?
Financing increased a little, this is correct, but the most important thing was decrease in goods. Maybe, 60 or 70 percent of this power plant is concrete, iron. When goods prices decreased, our cost decreased. Iron price decreased nearly fifty-fifty. In parallel with this, we decreased energy price. Were we wrong? We decreased it when the offers opened. Not with bargain afterwards.
Nevertheless, prices are not considered as high. It is said that they should be 7-8 cents.
Yes, this is correct. If someone gives 18 billion dollars and does not want this back, this becomes production cost. Even, it decreases under this amount. Well, what will be investment cost? The ones mentioning mention about the production cost. No one considers investment cost. Someone will give me 18 billion dollars not to take back, and I will provide the electricity for 7 cents.
If competition is organized once, no one attends
What happens if competition is not concluded in nuclear, in other words, is cancelled?
Nothing happens to me. I am a small partner here. My duty was to bring this investment to Turkey. I performed my duty as one of the oldest ones of the energy sector.
Can another competition be made again?
It can be made. What cannot it? But no one will attend. When this competition was made, there was very good economic climate in the world. The financing was abundant, everyone was wallowing in money. Despite this, no one gave offer due to size and difficulty of work…. Now there is a crisis. It is very difficult to find financing. I think no one will attend a new competition, no one will attend. No one will give offer. In my opinion, Turkey will close its nuclear book for a long time or state will have to make it itself. The state makes an investment of 18 billion dollars from its case. But it is difficult. It is very difficult in this conjuncture.
Even Greenpeace supported nuclear
What about environmental problems? There is broad nuclear contradiction.
Look, even Greenpeace supports nuclear anymore because it was understood that nuclear has least damage for the environment. Greenhouse gasses are the most dangerous gasses in terms of environment and global warming. There is no greenhouse gas emission in nuclear power plants. Greenpeace managers explain that we should direct towards nuclear any more. Probably, it was in your pages recently, increase of nuclear investments of Wall Street Journal is mentioned. Currently, about 500 nuclear power plants are active. This number will increase before long. France provides 90 percent of its energy from nuclear. USA also provides its energy from the nuclear. Iran, petroleum and natural as country, opened power plant. China and USA also opened power plant. Italia and Russia conclude contracts to purchase nuclear power plant from Russia.
Waste storage is the biggest problem.
Is it not problem in the entire world, but problem for us? Besides, technology in our power plant is the cutting-edge-technology. 80 percent of used nuclear fuel is recycled and re-used.
Why is there so much contradiction for this business?
There are big problems about energy in Turkey. There are investments that have not been made for years. This causes a deficit. When this deficit occurs, many people play game in energy. Do you know that do autoproducers sell the electricity for 32 piastres to state? They purchase from the state and sell to the state. They do not want that stands are destroyed. They want that state makes investment. But it is difficult. Bureaucrats there were scared. They were subject to unfair investigations.
IS 15 PIASTRES OR 29 PIASTRES HIGH?
There is price discussion at the most. It is said that prices are high.
They are saying and I am laughing. TETAS went out to tender from 10 piastres for electricity purchase a few weeks ago. Did you see incoming offers? They gave offer of 29 piastres. From production to be made with the natural gas… A separate tender was made for the Companies that will make production with hydroelectric. Offer of 26 piastres was given there. These offers came from producers and autoproducers for which investment was made and depreciation was completed. Those saying that nuclear price is high do not see that these offers, which have no financial cost and depreciation, are higher than nuclear. If nuclear price is high, what are these? But no one sees them. No one writes them. Value of the price given by the consortium in nuclear, which was decreased to today is 9,5 piastres. In other words, 15 piastres and it is fixed during 15 years. Which one is higher? 15 piastes or 29 piastres?
Why do not they write?
They will not write. There was silly news the other day. We offered to give share from the share to the public in energy. Some newspapers said that this offer is for the Supreme Court. We give share from the profit officially. We partner it to the profit. This is called Supreme Court. As if it was a secret work. We explained this. We wrote it in the offer. We said state should gain too. This is called Supreme Court. It is a shame. It is shamelessness but they are not ashamed! Then again, they base these claims on a report that has not been written yet. Top-level and general manager of the Institution makes an explanation that “This is falsified news. The report has not been written yet”, but they do not require making this news. They write full of mistakes. Their lies are told to their face but they do not care. They think that everyone is like them. They lobby on behalf of interest groups.
RENEWABLE ENERGY INVESTMENT SHOULD BE MADE
Everyone talks about renewable energy in Turkey and even in the world. Should not Turkey make investment here?
It should make investment. Of course, it should make but we should not be dreamy. The most important factor in energy is security of supply. Look who direct towards renewable energy. Countries that have no energy deficit and that completed their investments. Unfortunately, Turkey is not at that point. Investments, which will meet energy need of Turkey, are completed and then renewable energy is discussed. There is a wind fashion. Well, can we attribute Turkey’s energy to wind? There will be power failure, industry will be ceased and no operation will be made in the hospitals. What happened? No wind blew. Is it okay? Renewable energy is an auxiliary power. Wind blows, it rains, wind plant operates, hydroelectric power plant operates, and then institution making regulation says that, the wind blows, I have no need now and then natural gas power plant is ceased. Watt written in a wind plant is not important. It is important that for how many days and hours it generates that watt. Hydroelectric is like this. When nuclear power plant operates once, it generates energy for 365 days and 24 hours per year. The efficiency is 100 percent. The efficiency in natural gas is over 90 percent. It is eighty percent in coal. It is indefinite in the wind but it does not exceed 40 percent. These works are made due to environmental factors after everything ends. However, you should guarantee your energy supply at first. These investments should be supported. However, other investments should have no alternative.
There is no escalation in our offer, price is fixed for 23 years
Turgay Ciner explained the niceties that caused everyone to escape in nuclear power plant competition: No increase will be able to be made during 23 years. The price is fixed. There is no escalation. In other words, you will not be able to say ‘dollar rate decreased, increase my price’. Think, no one can estimate what inflation in dollar will be within next 23 years.
Will not you make any increase in energy price?
That caused everyone to escape in this competition. There is no increase. The same price after 23 years. The price is fixed. There is no escalation. You will not be able to say dollar rate decreased, increase my price. The price is fixed. Can you tell me how much will you sell newspaper after 23 years? Or let’s ask an industrialist, can he say me how much will he sell automobile in 2030, or how much will he sell shirt? We are saying this. We are announcing in advance how much we will provide energy in 2030 to Turkey. There was no one saying this apart from us. The price is fixed. There is no escalation, no increase and no rise.
In other words, it is obvious how much we will sell the electricity in 2022 in case you start construction. Well, what is its price decreased to today?
As I said beforehand, I think that it will be around 9,5 cents. Of course with figures of today. No one can estimate price of inflation in dollar in next 22 years.
Another criticism is external dependence in energy. We are purchasing natural gas from Russia. There are lobbies saying that dependency on Russia in nuclear is inconvenient.
It is full of crap. The first one is that when nuclear is activated, dependence on natural gas will increase. In other words, while one pan of scale increases, the other one will decrease. The second one is that the price is definite in nuclear during 20 years.
It is not definite what will happen in natural gas tomorrow. Here is Azerbaijan. It was angry and made an increase. It may be angry tomorrow and make an increase once more. There is nothing like this here. The price is fixed. There is guarantee. Besides, nuclear fuel does not have to be brought by Russia.
