The Nuclear Power Plants Authority (NPPA), a division of the Ministry of Electricity and Energy, awarded WorleyParsons the LE 900 million consulting contract two months ago. The parties signed the contract June 18, more than 50 years after Egypt’s nuclear program was established.

The decision came as a surprise to industry players as the government had announced that United States-based Bechtel was its first choice to carry out the contract in January this year. NPPA Vice Chairman for Studies and Nuclear Affairs Dr. Mohamed Mounir Megahed says talks with Bechtel broke down after months of “tedious and difficult” negotiations earlier this year.

“There were some differences in the terms,” says Megahed. “We were under the impression that they accepted the general terms and conditions because they said so, but when we started negotiations we discovered there were some deviations. They wanted changes that would alter the nature of their bid. I am not at liberty to say more but this was basically the problem. They were very adamant — they did not want to compromise.”

Representatives from Bechtel’s Egypt office refused to comment on the failed negotiations, citing a policy that prohibits employees from speaking to the media.

The nuclear facility is one of many energy projects under construction to address Egypt’s growing electricity needs, currently met via numerous steam and combined cycle plants powered by fossil fuels as well as renewable sources such as hydro power.

The World Bank, a multi-million dollar supporter of several ongoing energy projects in the country, estimates that Egypt’s energy demands are growing between 7% and 8% annually. Egypt has a stored capacity of almost 24,000 megawatts of electricity. Peak usage rests at around 21,000 megawatts. Analysts predict those numbers will jump to 57,000 megawatts and 73,000 megawatts respectively by 2027, driven by heavy industry and a sharp increase in population.

Aside from meeting energy demand, the nuclear project is also slated to diversify the nation’s energy sources, making it less vulnerable to market pressures, creating jobs and perhaps even giving nuclear engineering graduates from the University of Alexandria a reason to look for work inside Egypt.

Megahed says the NPPA is pleased with WorleyParsons, which ranked second out of seven companies vying for the lucrative contract. WorleyParsons, with over 200 staff members in Egypt alone, will be responsible for selecting the site and choosing the technology the power plant will employ, as well as tendering construction and procurement contracts, training staff and overseeing installation. The company is currently involved in six nuclear projects around the world, most of which are in Eastern European countries, such as Armenia, Bulgaria and Slovakia.

Joe Aikins, the firm’s general manager in Egypt, described the negotiations as “thorough” and “rather tough,” adding that the country’s more than 30-year history with nuclear technology and research has given the NPPA a concrete vision of how the project should be implemented. “The scope is to provide consultancy services throughout the length of the project. Our goal is to deliver that project safely, accurately, on time and on budget to meet the objectives of the Nuclear Power Plants Authority. [] The basic parameters for developing and executing the project are being reviewed, discussed and agreed upon. The end result of the initial meetings is an agreeable, detailed project execution plan,” he says.

Phase one of the project will span approximately three years. During this time WorleyParsons and the NPPA plan to choose the nuclear technology, evaluate and decide on the official project site, outline strategic plans including radioactive waste management and safety operations, and draft and approve engineering procurement and construction documents to be tendered.

“At the end of the three years we should have the technology commissioned, the [procurement] agreements negotiated or under negotiation, the site regulatory approval and the tender documents solicited and hopefully have some back so we know who will do the final detailed engineer procurement and installation,” says Aikins.

He says there could be an additional agreement between WorleyParsons and the NPPA to provide services beyond the 10-year period in terms of regulatory monitoring, maintenance, further staff training and site or equipment inspection. Phase two will include procurement and construction to be completed sometime in 2019.

Aikins is not predicting any specific challenges to the project, but admits there are a number of issues project leaders must plan for, such as the complexity of the scheme and issues concerning skilled labor, safety and quality. The fact that Egypt is home to large, sophisticated gas refineries, chemical plants and natural gas power plants and has been developing a nuclear program for a long time means that it can be done, and done well, adds Aikins.

Aikins predicts that the nuclear project’s scope will be clearer by the end of summer. An international team from the company toured the Daba’a site at the beginning of July. Ramses Khalil, WorleyParson’s regional manager of power, says the Daba’a site is the firm’s “preferred” site due to the continuous stream of data that has been collected there since it was chosen as a possibile site for a plant in 1980.

“Soon after the Chernobyl accident, Egypt basically put a break on the development of nuclear power. However, because of the investment at the site, they maintained some research and capabilities and basically a very up-to-date lab and a [research] tower that collects a variety of information — temperature, wind direction and seismic information,” says Khalil.

The data now has to be studied and processed to decipher whether the site is in fact the best choice. The other sites — all along the Mediterranean or Red Sea to provide the plant with water to cool excess heat — have not been studied as of yet, but that will change in the next few weeks as project staff begin to collect their own data.

The most important characteristic for a nuclear site, other than proximity to water, is its seismic activity, says Khalil. Fault lines and geothermal activity can compromise the integrity of the plant’s infrastructure. Chinese authorities were accused of unsafe building practices after a hydroelectric dam, several chemical factories and a host of power plants were structurally damaged in China’s Sichuan province during a massive earthquake on May 12 last year that killed nearly 100,000 people.

Khalil says the plant will consist of three parts: the reactor building where the nuclear reaction will occur; the turbine building that typically houses one to three turbines depending on the design; and the switchyard where the electricity produced by the turbines is routed to the national grid.

Nuclear waste and depleted fuel rods will be stored onsite in a dedicated area until it can be disposed of according to International Atomic Energy Agency (IAEA) standards. “The IAEA, the worldwide [nuclear] watchdog, has basically given Egypt a green light to obtain nuclear fuel rods and to manage their disposal,” says Khalil, adding that the nuclear site will have little impact on the environment around it, other than the construction itself. The delicate ecosystem around the reefs will also be unaffected because the water used to cool surplus heat from the reaction will be dispersed in a wide radius about two kilometers out to sea.

In terms of the technology, Khalil says there are four common nuclear models: American, French, Russian and Canadian, all of which have a certain number of subsets and derivatives dependent on the company that produces each. According to Khalil, all are solid technologies, but it’s too early for him to suggest which might be best suited to succeed in Egypt. WorleyParsons has approximately 1,300 engineers worldwide that are working in some capacity with all four types of nuclear technology.

Dr. Hafez El-Salmawy, managing director of the Egyptian Electric Utility and Consumer Protection Regulatory Agency, says the government must add 1,500, megawatts of power — enough to power most of Cairo — to the national grid each year simply to keep up with rising demand. “By 2027, the stored capacity will likely exceed 60,000 megawatts, almost triple the stored capacity now, which represents a substantial added capacity of over 40,000 megawatts that needs to be added over the next 18 years,” he says.

According to El-Salmawy, the Ministry of Electricity is hoping to add another 9,000 megawatts to the grid over the next few years with projects such as the 140-megawatt solar and combined cycle power plant in El-Kureymat — about 95 kilometers south of the capital — that is set to begin operations in 2010. The existing plant will be getting two additional natural gas turbines as well as a steam turbine, increasing energy production by 750 megawatts. A steam power plant in Abu Qir is scheduled to be complete on El-Kureymat’s heels in 2012, adding another 1,300 megawatts.

A third project underway in Ain Sokhna could add another 1,300 megawatts by 2015, using supercritical steam turbines, which burn hotter and more efficiently than conventional steam turbines. Expansion programs are also in the works at the Zafarana wind turbine site in the Gulf of Suez to help increase the percentage of energy produced by renewable sources from around 10% — the vast majority of which comes from hydro power — to 20% by 2020. Though the nuclear power plant will only add another 1,200 megawatts to Egypt’s total, barely covering Cairo’s needs, there is a definite possibility the government will consider building more plants on the same site to increase generation capacity, says Khalil, adding that the NPPA had originally thought to build four to five plants at El-Daba’a.

The benefits of having nuclear power go beyond consuming fewer fossil fuels and better protecting Egypt’s power sector from market fluctuations, such as the incredible rise and just as incredible decline in oil prices in 2008. Less dependence on natural gas, which powers the majority of thermal power plants, could also bolster Egypt’s coffers as it will mean more to sell to international buyers.

The program could also help reverse Egypt’s brain drain syndrome, offering nuclear engineering graduates a chance to work in their homeland if the salaries match Western standards, says University of Alexandria professor and head of the nuclear engineering department, Dr. Alya Badawi.

“I think a large number of our students are in the US. They have also gone to Canada and there are a few of our students in Japan, Dubai, Saudi Arabia, [and] Kuwait. They’re everywhere. I think everybody is excited [about the nuclear power plant] because our program was originally designed to provide home-grown experts. I think [whether graduates will return to Egypt] will probably depend on the economic situation. If they’re going to raise salaries of engineers working here, then yes there might be people returning,” she says.

The nuclear program at the University of Alexandria debuted in 1963 in response to Egypt’s plans for a nuclear power plant and the successful commission of the country’s first of two research nuclear reactors in 1961. Some 950 students have since graduated with a bachelor of science in nuclear engineering.

“Egypt was one of the first developing countries to recognize the importance of nuclear energy in solving energy capacity,” says Megahed. In 1955, the Atomic Energy Committee was formed under late President Gamal Abdel Nasser. In 1957 it became the Atomic Energy Authority, whose mandate was to pave the way for Egypt’s impending nuclear program. Four years later a 2-megawatt thermal power research rector was commissioned just outside of Cairo.

In 1964, bidders were invited to construct what was to be the first nuclear power plant in Borg Al-Arab near Alexandria. The project was cancelled after the 1967 war with Israel. After renewed aggressions with Israel ended in 1973, US President Richard Nixon offered to aid Egypt in its nuclear aims and construct a 600-megatwatt plant, says Megahed, but negotiations with the US collapsed when Nixon’s government demanded more control over the installation, says Megahed.

In 1983, Egypt tried again, calling for tenders to construct a 1,000-megawatt plant at the El-Daba’a site. Three years later, and just days before the government announced the tender winner, the Chernobyl nuclear accident shocked the globe and effectively shut the doors on Egypt’s nuclear hopes.

According to Megahed, the NPPA and Nuclear Energy Authority spent the next 20-plus years carrying out extensive studies at El-Daba’a. The wait was not in vain. In 2006, the government announced it would revisit the nuclear program. The plan to build a nuclear power plant followed a year later and a request for tenders was made in February 2008. Megahed says the $1 billion to $2 billion budget will be footed by the government and likely include loans.

Egypt’s civilian nuclear program has support from the US and the IAEA and the country has signed the Nuclear Non-Proliferation Treaty. US President Barack Obama made a point to discuss his country’s backing of civilian nuclear programs in his June speech in Cairo. While the US, Israel and the IAEA watch Iran closely, Dr. Mohamed Adel Salam, a senior analyst at Cairo-based think tank Al-Ahram Center for Political and Strategic Studies, says Egypt doesn’t have anything to worry about because of the nature of its nuclear program.

“The problem isn’t about the nuclear program, it’s about using the process of uranium enrichment to form weapons. In terms of Egypt, there are no intentions, nor any statement from officials here that they will build any facilities that can enrich uranium [as weapons],” he says. Though another researcher at the center told bt that Egypt’s original aim was to counter Israel’s budding nuclear weaponry program with its own, (See “The Nuclear Option,” by Erin Cunningham, March 2009, page 46) Egypt’s goals are entirely peaceful now.

For the time being, Egypt’s nuclear plans have not received much coverage in Israeli media, which is more concerned with the nation’s role as a mediator between Israel and the militant Palestinian group Hamas. Salam says Israel does not directly oppose Egypt’s plans, despite some rumblings from Israeli think tanks. Salam says that it is not just Israel watching Egypt’s nuclear progress — other Middle Eastern and North African countries will also be watching Egypt’s efforts closely to gauge the nation’s success, something Egypt is used to, says Megahed. “They look to Egypt for everything else. We are a poor country but we have large influence in the area,” he says.

But influencing the region is not a factor for the NPPA or the government, according to Megahed. Instead, realizing Egypt’s 50-year-old nuclear vision is about securing the nation’s energy supply and ensuring the government meets the country’s soaring power demands that fossil fuels won’t be able to cover. “We are not a country rich in energy resources. Our petroleum resources are very limited and so is our natural gas. I think [the government] realizes that the cost of energy would be very, very expensive if we cannot find alternatives,” he says.