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Cablegate: Japan Passive On Advocating Westinghouse's South

VZCZCXRO1261
RR RUEHDU RUEHJO
DE RUEHSA #3183/01 2501531
ZNR UUUUU ZZH
R 071531Z SEP 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 1673
INFO RUEHBJ/AMEMBASSY BEIJING 0654
RUEHHE/AMEMBASSY HELSINKI 0097
RUEHLO/AMEMBASSY LONDON 1285
RUEHMO/AMEMBASSY MOSCOW 0662
RUEHFR/AMEMBASSY PARIS 1154
RUEHUL/AMEMBASSY SEOUL 0222
RUEHKO/AMEMBASSY TOKYO 0501
RUEHTN/AMCONSUL CAPE TOWN 4816
RUEHDU/AMCONSUL DURBAN 9149
RUEHJO/AMCONSUL JOHANNESBURG 7389
RHEHNSC/NSC WASHDC
RUCPDC/DEPT OF COMMERCE WASHDC
RUEHUNV/USMISSION UNVIE VIENNA 0214
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 PRETORIA 003183

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF/S, EEB/ESC AND CBA, ISN
DOE FOR SPERL, PERSON, BIENAWSKI, PARKER, SCOTT, AND CLAPPER
DOC FOR J.DIEMOND
DEPT PLEASE PASS TO USTR FOR P.COLEMAN

E.O. 12958: N/A
TAGS: ENRG BEXP TRGY PREL IAEA EINV ECON SF JA
SUBJECT: JAPAN PASSIVE ON ADVOCATING WESTINGHOUSE'S SOUTH
AFRICA BID

REF: A. PRETORIA 3078

B. PRETORIA 317

1. (SBU) SUMMARY: The Government of Japan is unable to
manifest overt support for the Westinghouse bid for building
new nuclear plants in South Africa. Toshiba acquired
Westinghouse in October of last year, but Mitsubishi also has
a commercial relationship with competitor French Areva. The
GOJ appears unable to choose between the two big Japanese
commercial groups, even though it is unclear whether
Mitsubishi would actually participate in the French bid. End
Summary.

2. (SBU) Economic Counselor and Minerals and Energy Officer
accompanied Westinghouse SA Manager Rita Bowser on September
5 to call on the Embassy of Japan to coordinate advocacy
efforts on behalf of Toshiba/Westinghouse's bid for building
2-3 new nuclear power plants in South Africa (Reftels).
Embassy of Japan Minister Takayuki Miyashita stated that the
GOJ's position was "sensitive", because Mitsubishi has a
"friendly relationship" with French Areva, the main
competitor to Westinghouse for the South Africa bid.
Miyashita said that their embassy had received no answer from
Tokyo regarding whether they could support
Toshiba/Westinghouse's bid (prompted by the previous call of
Economic Counselor last February). Moreover, Miyashita noted
that they had received no contact from Toshiba regarding the
bid.

3. (SBU) The Westinghouse rep and Economic Officers probed
for some sort of support from the Embassy of Japan,
especially with respect to the expected visit of Toshiba
Senior Vice President Niwano to South Africa in October, but
Miyashita offered only a call on the Japanese Ambassador
(later expanded to a private dinner at the Japanese
Ambassador's residence). The Westinghouse rep outlined
Westinghouse's strategy and advantages for gaining its bid
for nuclear new build in South Africa, noting that the SAG
had identified selection of Pressurized Water Reactor (PWR)
technology (reftels) for which Westinghouse and Areva are the
only two SAG-approved suppliers. Economic Counselor noted
that the USG was able to approve advocacy for Westinghouse
because it was the sole U.S. supplier of this technology.
The Westinghouse rep noted that the Areva bid would not
likely include Mitsubishi-sourced technology or products.
Miyashita took note of this, but was unable to promise GOJ
support.

4. (SBU) Economic Counselor proposed an additional argument
in Westinghouse's favor, noting that Japan and the U.S. were
first and second as the two largest markets for South African
exports (together representing over 21% share), so South
Africa should consider this as a moral argument in favor of
the U.S./Japanese bid for a contract of this size. France is
not as significant of a market, ranking only eleventh with a
2% share. The Westinghouse rep noted that South Korea had
reportedly opened an office in South Africa to compete for
the nuclear bid, so they could not be counted out, even
though South Korea is not on the SAG list of approved
suppliers. (South Korea ranks 15th with a 1.7% share of SA
exports.)

5. (SBU) COMMENT AND NEXT STEPS: Westinghouse will urge
Toshiba to make a pitch to the GOJ to support the
Toshiba/Westinghouse bid and to manifest this support as soon
as possible. Toshiba will be sending executives to South
Africa in October (Corporate Senior Executive Vice President
Masao Niwano) and February (President and CEO Atsutoshi
Nishida) and Westinghouse CEO Steven Tricht will come in
November. The latter visit might be the best opportunity to
sponsor an event to support the Toshiba/Westinghouse bid.

PRETORIA 00003183 002 OF 002


Post will continue to argue for greater Japanese advocacy,
emphasizing that Mitsubishi will not likely be participating
in the Areva bid.
Teitelbaum

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