First with Financial Comment from Arabia

Why did Koreans win the $20bn UAE nuclear power order?

with 3 comments

There is never a dull day in the United Arab Emirates. Just when journalists thought it safe to put up their feet for a holiday between Christmas and the New Year the government issues a brief statement placing a landmark $20.4 billion contract for four nuclear power stations with Korean companies.

What happened to the expected deal with a US consortium led by General Electric, or for that matter the widely trumpeted French group headed by Electricite de France? We will never know, of course, these things are decided behind closed doors.

Korean triumph

But hats off to Korea Power, a state-run utility which supplies almost all the power in South Korea, Doosan Heavy Industries & Construction, Hyundai Engineering & Construction, Samsung C&T Corporation, and Westinghouse Electric – whose inclusion will be some sop to the disappointed Americans.

The news will be jumped on by the New Silk Road enthusiasts who foresee a radical shift in Middle Eastern business towards Asia as the global powerhouse of the future. In this instance they are literally and metaphorically on solid ground.

From a political standpoint the UAE is keen to sign up to peaceful nuclear power to make a point to both the US and Iran. But a rapidly growing UAE economy is set to double its electricity demand to 40,000MW by 2020, and it hopes by then its oil will be worth a lot more in exports than as a power source.

So this growing nation needs nuclear power. It is also commercially sensitive and the most likely reason for the Koreans winning the bid is that they came in with the best offer.

Lowest cost

After all if you are going for low-cost electricity, you might as well get is as cheaply as possible. South Korea has aggressive expansion plans for its nuclear industry and a deal with the UAE is clearly a feather in their cap. But Samsung built the Burj Dubai, the world’s tallest building due to open January 4th, so they are hardly unknown in the UAE.

The Korean government says it is also pursuing contracts in Jordan, Turkey and China. Perhaps they should be looking to other emirates in the Gulf. It is hard to imagine that Qatar is not going to copy the UAE and go nuclear.


Written by Peter Cooper

December 27, 2009 at 4:42 pm

3 Responses

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  1. To ANDY:
    What is the problem with a country supporting its own products? US manufacturing and industry has become too costly due to rising salaries, utility costs, real estate costs and manufacturing costs. This is undoubtedly of its own making. The US sought to become a service oriented country and it has done well in that regard. But the manufacturing aspect of the country has sufferred and the people own top knew that was a consequence when making the decision. So in essence, the US sealed its own destiny.

    For a country like Korea to support its own products is a good thing. If people want to buy Korean elsewhere (Like the UAE), they can but they don’t have to. If you’re in Korea then you should expect to buy Korean. It is immensely arrogant to think that there should be US or any other country’s products available for you when you are traveling.


    January 28, 2010 at 12:14 pm

  2. I sure hope that they make enough money to pay for their own defense, so that we can finally bring the thousands of American troops in South Korea home. The world policeman is bankrupt. And I’m sure the two Koreas will soon reunify and get along just fine.

    Bill Simpson in Slidell

    December 29, 2009 at 6:56 am

  3. I think they got the deal because they probably got the deal because they actually have a lot in common to where local projects in the UAE and Korea are usually only given to locals which are usually locally owned or government owned.

    If it were me I would not have given the bid to Korea for one main reason. I have lived in Asia for around 18 years now and travel quite often in Asia. The Koreans love to sell their products abroad but one trip to Seoul and you will see that their market is pretty much closed or locked for pretty much all imported item or products. You can find imported products in Korea but you will find that locals or at least most locals (90%+) will only buy their local products instead of imported products.

    The UAE of course doesn’t have anything to export other than oil and Korea needs oil so the locals in the UAE pretty much don’t have much to argue about when it comes to trade with Korea. 9/10 cars in Seoul are Korean,9/10 cell phones are Korean,9/10 laptops are Korean,9/10 TV’s are Korean and the list goes on and on. Even their red-light district only caters to locals while non-locals are asked to leave. The Korean Hypocrisy is beyond belief but to the Arabs in the UAE only support their biased and hypocritical export and import policies in Korea. The above not only applies to the UAE but Kuwait,Saudi,Qatar and every other country in the middle-east that doesn’t export many domestically made products.

    If the UAE was bidding for a project in Seoul I would pretty much bet my life on it that they would not award the project to the UAE as pretty much all projects in Seoul are only awarded to Korean bidders.


    December 28, 2009 at 11:19 am

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