Denial for $40bn nuclear deal on way by UAE

The speculation that UAE is about to award the largest ever energy contract in the Middle East for the development of a nuclear power plant, was denied last night by UAE.

The denial appeared after the industry sources claimed that the UAE will very soon announce a winner for the contract pertaining to the construction of at least four reactors, which consultancy Eurasia Group estimates said may cost as much as $40 billion (BD15bn).

Sources said that the contract is most likely to be won by the consortium from France, which includes nuclear group Areva, GdF Suez, and Total.

A close source to the French group said: "We think we are still well positioned to win it, we have the nuclear expertise. The winner will take it all, the bid was for two reactors originally but then they (UAE) wanted four and maybe six, whoever wins gets the whole package."

The Eurasia group reported, "A major deal with the French government would fit within the UAE's diversification plans in terms of both energy and security."

In the month of May, President Nicolas Sarkozy had arrived in UAE in order to open a military base; a visit, which by some analysts was seen as enhancing the French consortium's prospects of winning the contract.

Christian Koch, director of international relations at the Gulf Research Centre, said: "France is already a major partner to UAE in the defense area and I wouldn't be surprised if they are leading in the bid now."

Analysts specified that an economic boom has been initiated by record oil revenues, which has stressed domestic power grids in the UAE, and to keep the export cash coming in, Abu Dhabi is looking towards nuclear energy for help in capping fuel burned for power at home.