A Glowing Achievement for Korea

      December 28, 2009 12:25

      A Korean consortium led by the nation's power company KEPCO has been selected by the United Arab Emirates to build a nuclear power plant there. President Lee Myung-bak, who is visiting Abu Dhabi, met with UAE leader Sheikh Khalifa bin Zayed Al Nahyan on Sunday and gave the deal the final push. The contract marks Korea's first nuclear power plant export, and the KEPCO consortium defeated rival bidders from France, Japan, and the U.S. -- countries which once trained Korean engineers in the infant stage of nuclear energy production.

      Until now, there were only five countries that had the technology to export – Canada, France, Japan, Russia and the U.S. Korea, the sixth, is the only country in the group that moved from receiving technological assistance to exporting it. This is another milestone for Korea, which has also emerged from being a recipient of international aid to an economic powerhouse that now helps other countries grow.

      The deal is worth US$40 billion. Construction of the reactors alone costs $20 billion, which is equivalent to exporting 1 million mid-sized passenger cars or 180 oil tankers capable of transporting 300,000 tons of crude oil. The deal is expected to create 110,000 jobs over the next 10 years. It is also expected to lead to contracts for Korean companies to the tune of another $20 billion for the operation, maintenance and fuel supply of the reactors during their 60-year lifespan.

      Nuclear power generation is the apex of high technology since it encompasses the fields of nuclear physics, electronics and electrical engineering and requires the flawless operation of more than 2 million machines to function properly. In contrast to other products, countries that import nuclear power plants consider the level of technology above all else instead of price competitiveness, so the successful export of the technology proves that a country has enough faith in Korean engineering skills to entrust them with the lives of its citizens. As global oil and coal prices rise while carbon emission regulations grow more intense, a renaissance of nuclear power is expected, with global demand for plants forecast to surpass W1,000 trillion. When it comes to winning construction orders, past experience counts as much as technological ability. Korea has gained a solid foothold in this new market with the UAE order.

      KEPCO formed a consortium with Westinghouse Nuclear Power Plants of the U.S. and Toshiba Power Systems of Japan because there are still areas that require various technologies patented by those companies. But experts say it is only a matter of time before Korea finds a cost-efficient way to replicate them and become completely self-sufficient in terms of nuclear power technology.

      However, technology alone does not determine success or failure. The diplomatic skills of the exporting country must complement it. The U.S. and France, which competed with the KEPCO consortium in this bid, have close ties with the UAE, even operating military bases there. French President Nicolas Sarkozy visited early last year, just after the power plant bid was announced, to lobby support for his country, with the French government offering to deploy more soldiers to the UAE, replace its fighter jets and even open a branch of the Louvre in the desert.

      Korea seemed to face insurmountable odds competing with such heavyweights in the industry. But it was able to catch up because it showcased the world's best operation rate for nuclear power plants and the least plant stoppages, while the government provided behind-the-scenes support. Lee, who had been commanding the negotiations from behind the scenes, flew to the UAE in the final phase to provide the push needed to seal the deal.

      It was a chance for Lee to redeem himself after a failed bid to sell Korean-made T-50 fighter trainer jets to the UAE, which opted to buy Italian models instead, and he passed with flying colors. The success of such major deals depends on the diplomatic skills of a country's leader. Sarkozy aggressively pitches French nuclear plants, fighter planes and submarines, and Russian Prime Minister Vladimir Putin played a central role in his country's success in winning the 2014 Winter Olympics bid. But Lee has shown that he is second to none among world leaders in that respect. Korea can expect more success stories if its top technology and the president's knack for sales diplomacy come together.

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