A government-private sector mission has demonstrated its desire to win construction orders for nuclear power stations in Vietnam, but some significant hurdles must be cleared first.
A group of chairmen and presidents of electric power companies and nuclear power plant manufacturers, led by Economy, Trade and Industry minister Masayuki Naoshima, met with Vietnamese prime minister Nguyen Tan Dung in Hanoi on Wednesday.
The mission submitted a construction and operation proposal that included plans for financial assistance and development of human resources. Naoshima and others also attended a series of meetings with top Vietnamese government officials.
"We were able to send a strong message to the Vietnamese side. I think the Vietnamese side understood our passion," Naoshima told reporters.
Private firms represented in the Japanese mission are Tokyo Electric Power Co., Chubu Electric Power Co., Kansai Electric Power Co., Hitachi, Ltd, Mitsubishi Heavy Industries, Ltd and Toshiba Corp.
Those firms will have a stake in International Nuclear Energy Development of Japan, a tentatively named government-private sector firm to be launched in autumn that will promote overseas sales of nuclear power plant technology.
Ichiro Takekuro, who will be president of the corporation, is a member of the mission.
Hitachi provides expertise on boiling water reactors, and MHI on pressurised water reactors. Toshiba has know-how on both BWRs and PWRs.
The firms told Vietnamese officials they will be able to provide guidance on various aspects of nuclear power plant operation, from construction to maintenance.
Dung praised Japan's nuclear power plant technology and said Vietnam will consider the mission's proposal "in a positive and earnest manner, for the benefit of both countries."
Stakes high, competition stiff
Winning business orders in Vietnam has been identified as an urgent priority by the government, as the global nuclear power industry continues to expand.
Vietnam plans to construct four reactors by 2014. Russia is seen as likely to win the contracts for two of those, leaving Japan and other countries to compete for the others.
There are obvious potential long-term benefits of getting in on the ground floor of Vietnam's nuclear expansion, as the nation plans to construct 10 more reactors by 2030.
Other nations in Asia enjoying continued economic growth also have plans to construct nuclear power stations.
Japan lost out to South Korea in December in a bid to win construction orders for four nuclear power plants in the United Arab Emirates, bringing an even greater sense of urgency to courting the governments of other nations.
"We can't afford not to win orders in Asia," a senior Economy, Trade and Industry Ministry official said.
Potholes in the road ahead
A major obstacle for the Japanese mission's efforts is that Japan and Vietnam have not signed a formal nuclear cooperation agreement to enable the transfer of nuclear plant hardware and technology between the two nations.
Russia, France and South Korea, which are also wooing the Vietnamese government, all have signed such agreements with Vietnam, and thus are one step ahead of Japan.
The Japanese mission has asked Vietnam to upgrade preliminary talks on the agreement launched in June to the status of official negotiations, but Vietnam has not agreed to the request.
The dynamics of relationships within the mission also present challenges. Hitachi, MHI and Toshiba are united in their efforts to win contracts in Vietnam, but in other countries the three firms are rivals, having formed corporate alliances with different overseas firms.
How well the three firms can reconcile these different relationships in different markets will have great bearing on the mission's success in Vietnam.
Political conditions in Vietnam represent another concern. A major leadership reshuffle is expected to take place at the Communist Party convention at the beginning of 2011, which could cause progress on nuclear development programmes to stall.
"Large-scale projects will move with the officials [who are now in charge of them]," a source close to a general contractor firm in Japan said.
Despite the shadows cast by these factors, however, both the government and the private-sector parties hope progress will be made toward the mission's goal at the Japan-Vietnam summit scheduled for October.
http://www.yomiuri.co.jp/dy/business/T100826004668.htm
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