Insight:
Japan largely excludes foreign firms in Fukushima clean-up
Nearly
two years after a massive earthquake and tsunami caused meltdowns at
the Fukushima nuclear plant, Japan is failing to keep a pledge to tap
global expertise to decommission its crippled reactors, executives at
nuclear contractors from the United States and Europe say.
13
December, 2012
The
result, they warn, is that a process expected to take more than 30
years and cost at least $15 billion could take longer and cost more
as contracts are channeled through domestic heavyweights such as
nuclear reactor makers Toshiba Corp and Hitachi Ltd, and general
contractors such as Taisei Corp.
A
review of bidding records by Reuters shows companies from outside
Japan have failed to win any of the 21 contracts awarded this year to
develop technologies crucial for the unprecedented job of scrapping
the four damaged reactors at Fukushima.
"There
appears to be a desire to treat this as a science project and
reinvent the wheel," Jeffrey Merrifield, senior vice president
of U.S. nuclear engineering firm Shaw Group Inc's power division told
Reuters.
Contracts
awarded since January represent only the initial work at Fukushima.
But a half-dozen executives at companies with nuclear industry
experience raised questions about the Japanese government's and
Tepco's oversight of the process.
Some
executives worry that being shut out now risks their ability to tap a
growth market, since Japan could scrap dozens of reactors over the
coming decades. Most asked not be named for fear of jeopardizing
their ability to win future work in Japan.
Takuya
Hattori, president of the Japan Atomic Industrial Forum, a group
representing the nuclear industry in Japan, said the government has
not been responsive to complaints about the bidding process. "They
are shutting that criticism out incredibly deftly," said
Hattori, a 36-year veteran of Tokyo Electric Power Co Inc, the
operator of the Fukushima plant.
A
9.0 earthquake on March 11 triggered a 15-metre tsunami that smashed
into the 40-year-old seaside Fukushima Daiichi nuclear plant, setting
off a series of events that caused its reactors to start melting
down.
Hydrogen
explosions scattered debris across the complex and sent up a plume of
radioactive steam that forced the evacuation of more than 80,000
residents near the plant about 240 km (150 miles) northeast of Tokyo.
The
repeated failures that dogged the government and Tepco in the months
after the disaster undercut confidence in their response to the
disaster and dismayed outside experts, given corporate Japan's
reputation for relentless organization.
After
that, Japan promised to accept more outside assistance.
COLD
SHUTDOWN
The
Fukushima plant was declared to be in "cold shutdown" a
year ago, a stable phase when water used to cool fuel rods remains
below its boiling point. That marked the start of a decommissioning
process that could take 40 years.
Under
a roadmap drafted by Tepco, radioactive fuel rods will be removed
from Reactor No. 4 starting next November. After that, melted fuel
inside three other reactors damaged by meltdowns and hydrogen
explosions would be extracted. The work is projected to take more
than a decade.
A
government oversight panel has estimated it will cost $15 billion to
decommission the reactors, not counting for the costs of disposing of
radioactive waste.
But
large uncertainties hang over the overall cost of the disaster. Tepco
recently said compensation for evacuated residents and
decontamination of areas outside the boundary of the Fukushima plant
could double from previous estimates to almost $125 billion.
Louisiana-based
Shaw Group worked on clean-up projects after the Three Mile Island
and Chernobyl accidents and in decommissioning eight U.S. commercial
reactors.
"There
seems to be a real desire to rely on Japanese contractors to do this
work," Merrifield said. "You can try and do it all
yourself, which takes a lot more time without benefit of prior
experience, making a lot of mistakes along the way."
But
an executive with a Japanese nuclear firm said that given the
long-term nature of the clean-up project, it makes sense to go with
firms at home.
"Foreign
firms simply sell their product without providing back-up services or
maintenance. We can't sign a contract with a company that we can't
get in touch with immediately and one that will rush to deal with any
problems right away," the executive said.
TRANSPARENCY
'NO. 1 PRIORITY'
The
majority of contracts for Fukushima have been awarded directly by
Tepco, which outsources decontamination and debris-clearing to
general contractors. Decontamination contracts outside of the plant
site are handled by Japan's environment ministry and local
governments.
Japan's
Ministry of Economy, Trade and Industry has so far allocated about
$11 million to Toshiba Corp, Mitsubishi Heavy Industries and Hitachi
GE Nuclear to fund technology development for the year to March. That
includes a project to develop sensing robots that can enter highly
radiated areas to pinpoint the site of the meltdown.
"This
is a project we are pursuing with taxpayer funds, so we believe it is
our No. 1 priority to be transparent," said Kentaro Funaki,
director of the ministry's nuclear accident restoration office.
Funaki
said METI was pushing to double the bidding period to four weeks and
pointed to a recent contract offered by Japanese radiation management
firm Atox Co Ltd specifically to foreign contractors as a sign of
increased openness.
METI
and the heavy manufacturers held workshops in March and April to
gather information on foreign technology that could be used at
Fukushima.
British
Amec PLC, Areva, Westinghouse and the Idaho National Laboratory
pitched technologies that can be used to remotely inspect and repair
damaged reactors.
Japan's
three major nuclear companies say they post notices of bids on their
websites.
Hitachi
GE Nuclear posts bid notices on its website in both English and
Japanese. The company said it was working as quickly as possible to
restore and rebuild Fukushima and the short bidding periods were not
designed to shut out foreign firms.
Toshiba
said it posted contracts on its website, but deletes them after a
vendor is selected. Contracts are awarded by an outside panel of
experts with the highest score given to technology and cost. Toshiba
declined to comment on the lack of foreign involvement in research
contracts.
Mitsubishi
Heavy recently posted a notice on its website that it would soon
invite bids for equipment to investigate the pressure containment
vessels at the Fukushima Daiichi plant.
"THE
DOORS ARE OPEN"
Japan's
government and Tepco have emphasized the importance of international
involvement in the Fukushima clean-up. In an interview with Reuters
in October, Tepco president Naomi Hirose said the utility was seeking
expertise from all over the world.
To
be sure, U.S. and European companies have had some success.
California-based
Kurion and French nuclear giant Areva designed the first water
purification systems at Fukushima. That was followed by equipment
supplied by Toshiba and Shaw that doubled Tepco's ability to process
contaminated water. The latest water purification equipment made by
Toshiba and Utah-based Energy Solutions was installed earlier this
year.
"I
would tell you that if the roles were reversed, Americans would want
American firms leading the way," said John Raymont, president
and CEO of Kurion. "For companies that have the special know-how
that is transferable, the doors are open."
Shaw's
Merrifield said his company was no longer working on any projects in
Fukushima. Shaw sold its stake in nuclear plant company Westinghouse
Electric Co to Toshiba for $1.6 billion in October.
Many
of Japan's 50 nuclear plants are expected to be decommissioned in the
coming years. The Japanese government has pledged to eliminate
nuclear power from the energy mix by the 2030s and popular opinion is
turning against the industry.
"At
the end of the day, it's not about just Fukushima," said one
executive at an overseas engineering company, who asked not to be
named because of the company's business interests in Japan. "You
get in now, establish a relationship and build trust and there is a
lot of work that you can do."
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