Turkey’s Energy and Natural Resources Ministry on Tuesday said it was seeking to resolve a dispute between the parties involved in the construction of a $20 billion nuclear power plant by Russia’s state-run nuclear energy firm Rosatom in Akkuyu, southern Turkey.
Akkuyu Nükleer, a Rosatom subsidiary that is building four reactors at the site on the Mediterranean coast, on Saturday said it signed an agreement with TSM Enerji to undertake the remaining construction work at the plant after terminating a deal with Turkish firm IC Içtaş.
IC Içtaş on Monday called the move unlawful and said it had launched a legal challenge. It accused Rosatom of attempting to "reduce Turkish corporate presence" on the Akkuyu Nuclear Power Plant (NPP) project.
Mersin-based TSM is owned by three Russia-based companies, according to the Turkish trade registry.
"Our ministry has taken the necessary initiatives to resolve the dispute between the parties," the Turkish Energy and Natural Resources Ministry said in a statement late on Tuesday.
"Our priority is to ensure that all contractors and employees who have been serving at the construction site since the beginning of the project do not suffer any grievances and that the project is put into service on time," it said.
Akkuyu Nükleer did not give a specific reason for ending the deal with IC Içtaş but said the contract with TSM would ensure work was completed by agreed dates and that workers were paid on time.
IC Içtaş suggested the move could result in a delay in the construction process. It said TSM was a limited liability company that doesn’t have the ability to complete the work.
The company said it would take Rosatom to arbitration in London, as well as pursue domestic legal action in Turkey, according to a statement issued to Bloomberg News on Monday.
The Turkish government aims to start operating the first reactor at the Akkuyu plant by the middle of 2023, the 100th anniversary of the founding of the Republic of Turkey.
The remaining three reactors are due to start operation by the end of 2026, at a rate of one per year to ultimately have a total installed capacity of 4,800 megawatts (MW).
Once completed, the plant is expected to produce up to 10% of domestic electricity needs.
The plant in its current shape is one of the largest construction sites in the world.
The plant, which will have an estimated service life of 60 years with a possibility to extend it for another 20 years, will produce carbon-free energy around the clock. As a baseload plant, it will play a leading role in reducing dependence on imported energy resources, especially natural gas.
The giant project is expected to employ around 15,000 people during its peak construction period, and about 4,000 people during its operations.
President Recep Tayyip Erdoğan has previously suggested that Turkey could work with Russia on the construction of two further plants. He is set to hold talks with Russian President Vladimir Putin in the Russian Black Sea resort of Sochi on Friday.
Akkuyu is the world’s first nuclear power plant project implemented through a build-own-operate model. Under the long-term contract, Rosatom has agreed to provide the power plant’s design, construction, maintenance, operation and decommissioning.
The firm holds a 99.2% stake in the project that is estimated to cost around $20 billion (TL 357.98 billion), marking the biggest investment in Turkey’s history implemented at a single site.
Rosatom has been reported to have sent around $5 billion to Akkuyu Nükleer last week. Two other similar dollar transfers are planned in a matter of weeks, Bloomberg News reported Friday, citing senior Turkish officials with direct knowledge of the matter.