Korea failed to win contracts to build nuclear power plants in China in 2004, South Africa in 2007, and Canada last year.
Yesterday, however, a Korean consortium landed a mega deal worth 40 billion U.S. dollars to build four nuclear reactors in the United Arab Emirates. Despite having no experience in building such plants overseas, Korea has trumped the U.S. and France in securing the largest nuclear energy deal in world history.
Experts say an effective strategy helped land the contract for Korea after a year-long battle. The bidding for the project began in May, but the Korea Electric Power Corp., or KEPCO, began preparing for it from December last year.
After a Q&A session for the project was held in Abu Dhabi in February, KEPCO decided to create a global consortium in systematic fashion.
First, KEPCO joined hands with the U.S.-based Westinghouse Electric, now a unit of Toshiba Corp. of Japan, and Britains AMEC. A KEPCO official said, By joining forces with foreign companies, we were able to promote ourselves as a global team led by Korea.
The foreign companies in our consortium were approached by our competitors Hitachi and Areva, but considering our low bidding price and stable operational capability, they decided to join us.
The Korean consortium also paid the utmost attention in selecting construction companies. Through careful screening, Hyundai Engineering and Construction, and Samsung C&T Corp., which are well known in the UAE, were chosen.
Along with KEPCO, Korea Nuclear Fuel, Korea Hydro and Nuclear Power, Doosan Heavy Industries and Engineering, and Samsung Heavy and Engineering joined the consortium. This drew the UAEs attention to the consortiums ability to assume responsibility for the nuclear plants from construction to operation.
An official at the Knowledge Economy Ministry in Seoul said, We actively promoted our comprehensive system from design, technology development and construction to operations while Areva, our most formidable competitor, had only the ability to build nuclear plants. This strategy worked.
The road to the final selection was not smooth, however. Due to close ties between the UAE and France in politics, economy and military affairs, rumors swirled early this month that the French nuclear group Areva would win the bid. French President Nicolas Sarkozy also visited Abu Dhabi in May to help Arevas cause.
Not to be outdone, the Korean government pulled out all the stops to win the contract. High-ranking officials from the ministry frequently called their counterparts in the UAE to explain the advantages of selecting the Korean consortium. The Korean presidential office of Cheong Wa Dae, the Education, Science and Technology Ministry, and the Defense Ministry did also their part.
A KEPCO official said, I never imagined such full support from the government in the initial phase of the bid, adding, The Office of the Prime Minister and Cheong Wa Dae took the lead in meeting the requirements of the bidding team.
From the beginning, then Prime Minister Han Seung-soo led the support campaign, and after he left office in November, Cheong Wa Dae took over.
A Cheong Wa Dae source said, The presidential office even ordered all ministries to help meet every need of the bidding team without delay.
Korea also boosted its international image by becoming an exporter of nuclear power plants in just 50 years, and this helped the bid. An official at the Knowledge Economy Ministry said, The UAE has no technology in nuclear power generation and is interested in getting it.
In this light, the UAE hopes to become a nuclear power plant exporter like Korea and this influenced the final selection.
In addition, the news that Areva failed to meet a construction deadline in Finland for two years and consequently had building costs double also helped the Korean consortium win the UAE deal.
Link http://www.google.com/hostednews/canadianpress/article/ALeqM5g1tjS9ZH1BN5K35wFLqhk-lkTziQ
UAE awards $20-billion nuclear power contract to Korean consortium By Adam Schreck (CP) Dec 27, 2009
DUBAI, United Arab Emirates The United Arab Emirates has awarded a South Korean consortium a prized $20-billion deal to build nuclear reactors in the oil-rich country.
Emirates Nuclear Energy Corp. said Sunday it chose the Korean team because it was "best equipped to fulfil the government's partnership requirements." The state-run company valued the deal for four 1,400-megawatt reactors at about $20 billion.
The winning bid, led by Korea Electric Power Corp., beat out proposals from a French team and one led by the United States and Japan. The Korean consortium includes Samsung, Hyundai, Doosan Heavy Industries, Japan's Toshiba and Westinghouse, the UAE's official WAM news agency reported.
"We look forward to a long and productive relationship as we work toward powering the future growth of the UAE with low-carbon, peaceful nuclear energy," ENEC chief executive Mohamed al-Hammadi said in a statement.
The UAE is the world's third largest oil exporter but must import natural gas to run many of its existing power plants. It says its energy needs are expected to almost double by 2020.
The United States earlier this year signed an agreement with the UAE for the country to import, rather than produce, fuel for its nuclear reactors. The Emirates committed not to enrich uranium or reprocess spent nuclear fuel into plutonium, which is used in nuclear bombs.
Washington had promoted its plan to help the UAE develop peaceful nuclear power as a model of the kind of co-operation it would like to achieve with Iran, which the U.S. and its allies suspect is using a civilian program as a cover to develop an atomic weapons capability.
The UAE sits just across the Persian Gulf from Iran. Although the Arab state has long-standing commercial and cultural ties to Iran, it is also wary of Tehran's nuclear ambitions.
The deal marks the first time that South Korea has exported a nuclear power plant. The Asian country's Ministry of Knowledge Economy said the deal is expected to bring South Korea a total of about $40 billion from building the nuclear reactors and participating in their operation.
The ministry hailed the deal as the biggest single contract that the country has ever won overseas.
The deal "is seen as resulting from the UAE's high appreciation for the competitiveness of Korean nuclear reactors," the ministry said in a statement.
South Korea first introduced atomic power in 1978 and now has 20 nuclear reactors in operation. The country relies on atomic power for about 40 per cent of its electricity.
The Emirates has said it plans to begin construction on its nuclear plants in 2012.
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