Chinese School - France wins deal for nuke plants

BIZCHINA / Overseas Investment

France wins deal for nuke plants

By Wang Ying (Shanghai Daily)
Updated: 2007-03-06 14:28

China will award a contract to build two nuclear reactors in its
southeast to France's Areva SA, a Chinese official said yesterday.

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The two sides are working on a final accord to build the reactors at
Yangjiang in Guangdong Province, Qian Jihui, a senior adviser at China
National Nuclear Corp, the nation's top nuclear reactor builder, said in
Beijing. The contract was originally awarded to Toshiba Corp's
Westinghouse Electric Co, which will get an agreement for two other
reactors in Shandong.

China needs to add two reactors a year to meet a 2020 target of getting
four percent of its power from nuclear energy from about 2.3 percent now.
Areva and Westinghouse are competing to build as many as 26 more reactors
by 2020 as China turns to atomic energy to cut pollution and reliance on
oil.

"Awarding the contracts to two companies will give China more room in
later negotiations," said Yan Shi, a Shanghai-based analyst with Core
Pacific Yamaichi International Ltd.

Westinghouse originally won a US$5.3 billion agreement on December 16 to
build reactors at Yangjiang and Sanmen, after outbidding Areva and
Russia's AtomStroyExport following almost two years of negotiation and
lobbying. France's President Jacques Chirac promoted Areva's bid when he
met his Chinese counterpart, Hu Jintao, during a visit to Beijing in
October.

The parties will sign a final agreement "very soon," Qian told reporters,
without giving specific reasons for the decision to award the contract to
build the reactors in Guangdong Province to Areva instead of Westinghouse.

China plans to import uranium from Australia, Canada, South Africa and
Kazakhstan to fuel its expanding nuclear power capacity, Qian said. China
has nine reactors operating in Zhejiang and Guangdong provinces. Six are
under construction in Jiangsu in the east and in Guangdong. These
projects have a combined capacity of about 12,000 megawatts. China plans
to use Russian technology for two reactors at the Tianwan Nuclear Plant
in Jiangsu, Qian said. "China and Russia have a close relationship," he
said. "Awarding nuclear reactors could be a deal boosted by political
ties."

Paris-based Areva may build the Yangjiang reactors, among four originally
earmarked for Westinghouse, which will instead get a contract for two
reactors at Haiyang in Shandong Province, according to Bloomberg News.

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