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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAK #1315/01 1501444
ZNR UUUUU ZZH
R 301444Z MAY 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 2313
INFO RUCPDOC/USDOC WASHDC
RHEBAAA/DEPARTMENT OF ENERGY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHUNV/USMISSION UNVIE VIENNA 0154

UNCLAS SECTION 01 OF 02 ANKARA 001315 
 
SIPDIS 
 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
STATE ALSO FOR EB/CBA FRANK MERMOUD 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EINV BEXP TU
SUBJECT:  TURKISH PRESIDENT VETOES NUCLEAR ENERGY LAW 
 
REF: A) ANKARA 1177 
 
B) ANKARA 1121 
C) 06 ANKARA 6056 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE HANDLE ACCORDINGLY. 
 
¶1.  (SBU) SUMMARY: On May 8 the Turkish Parliament passed the long 
pending Nuclear Energy Law, but on May 24 President Sezer vetoed the 
legislation based on a few technical provisions concerning 
privatization and government obligations.  Even in the unlikely 
event that the parliament overturns the veto and the draft law 
survives potential legal challenges, Turkey still faces many 
obstacles in implementing its decision to add nuclear power to its 
energy mix, including clarifying the government role, getting the 
public on board, establishing an appropriate regulatory authority, 
and dealing appropriately with environmental issues and nuclear 
waste.  Having burned their fingers in earlier attempts to establish 
nuclear power plants in Turkey, American companies have responded 
cautiously.  Cooperation on regulation or other technical aspects of 
nuclear power technology are still impeded by the hold up with 
respect to the bilateral Agreement on Cooperation on Peaceful Uses 
of Nuclear Energy.  End Summary. 
 
¶2.  (SBU) BACKGROUND: Although Turkey has rich uranium reserves and 
a nuclear power plant has been on the agenda of the Government since 
the early 1960s, Turkey does not have any nuclear power plants in 
operation or under construction.  Despite lengthy research, detailed 
preparation efforts, and tender processes for previous government 
attempts in 1960, 1968, 1974, and 1998 such projects, all failed for 
different reasons, including "NIMBY", environmental concerns, and 
tender irregularities.  Having gone far down the road in previous 
attempts, U.S. firms General Electric and Westinghouse are very 
cautious.  The government has determined that Sinop, a province on 
the Black Sea coast, is the best location for a first nuclear power 
plant in Turkey's current plan to build three reactors totaling 5000 
MW. 
 
--------------------------------------------- ------- 
Parliament Passes Nuclear Law - But President Vetoes 
--------------------------------------------- ------- 
 
¶3.  (U) On May 8, the Turkish Parliament adopted a Nuclear Energy 
Law designed to attract private investments to Turkey's nascent 
nuclear sector.  The President took his full review period and 
vetoed the legislation on May 23, citing technical constitutional 
objections with three sections related to government obligations and 
privatization methodology.  The Parliament may send the law back to 
the President with or without making amendments.  In such a second 
submission, the President would not have a right of veto, but could 
refer the law to the Constitutional Court.  However, it seems 
unlikely that Parliament will act before it dissolves on June 3 in 
the run-up to the July 22 elections, creating another unfortunate 
delay. 
 
¶4.  (U) The draft law established the legal basis for the 
construction and operation of nuclear power plants with an emphasis 
on encouraging the private sector to take the lead.  The GOT has 
determined that developing a nuclear generation capability is 
necessary to meet fast growing electricity demand, which is expected 
to exceed supply within the next few years.  The law would create 
processes and procedures for licensing private companies to build 
and operate plants after evaluation by the relevant ministries and 
public entities, including the Ministry of Energy (MENR). 
 
¶5.  (SBU) The law would have authorized TAEK to determine criteria 
for private companies to qualify as builder/operators of nuclear 
facilities.  Any company meeting those criteria would make a 
proposal to the GOT, which, the draft law states, should focus on 
financial considerations in approving proposals.  The law would 
provide that proposals can include requests for government purchase 
guarantees.  In a meeting with Ambassador (Ref B), Energy Minister 
Guler described this as a simple transparent process that would 
minimize opportunities for corruption that has hindered previous 
energy initiatives in Turkey. 
 
¶6. (U) The draft also provided that a decommissioning fund and a 
national radiological waste fund be established to meet costs 
associated with the construction, licensing and operation of the 
temporary and permanent waste storage facilities, transport and 
processing of waste, research and development studies related to 
nuclear waste management, and eventual dismantling of the nuclear 
power plant.  President Sezer cited this provision as creating an 
undue and unconstitutional burden on the Treasury. 
 
¶7.  (SBU) The law also would have empowered the Council of 
 
ANKARA 00001315  002 OF 002 
 
 
Ministers, MENR, TAEK and the energy regulator (EMRA) to regulate 
and supervise the implementation and supervision of certain 
provisions of the law.  For example, the authority to determine the 
principles and procedures for the selection of authorized companies 
rests with the Council of Ministers, while the authority to prepare 
and conduct the selection process of authorized companies is granted 
to MENR.  Initially, TAEK would be the regulatory authority in the 
nuclear energy sector.  EMRA, which is the regulatory authority in 
the electricity, natural gas, petroleum, LNG and renewable energy 
sectors, would not have any regulation or supervision authority with 
regard to nuclear power plant operators.  The law however foresees 
creation of a new regulator analogous to the U.S. Nuclear Regulatory 
Commission. 
 
¶8.  (SBU) COMMENT: While the President has often opposed AKP 
government initiatives and opposed economic liberalization measures 
on nationalistic grounds, some observers expected him to support the 
nuclear legislation.  The President vetoed the law based on 
technical provisions, citing constitutional issues and government 
obligations which may provide a basis for sending the law to the 
constitutional court if the Parliament resubmits it to him.  The 
political calendar may cause it to be shelved for now, pending a 
potential new Government.  Whether or not the draft legislation 
eventually becomes law, the Government still faces many obstacles in 
advancing its nuclear power agenda, including clarifying the 
Government role, getting the public fully on board, establishing an 
appropriate regulatory authority, and dealing appropriately with 
environmental issues and nuclear waste.  Since the Government will 
have to pick the "low-bidder" or the company requiring the lowest 
Government purchase guarantee, the most qualified company may not 
necessarily win.  The Government has expressed commitment for the 
private sector to develop nuclear plants, but the new law includes a 
provision for the state taking it on in the event that the private 
sector does not step up.  Nuclear power is a great opportunity for 
cooperation with the U.S. NRC on regulation, as well as with U.S. 
companies, but lack of movement on the bilateral Cooperation in 
Peaceful Uses of Nuclear Energy remains an impediment. 
Wilson