In late April, one of the leading investors in a project to build a joint Japanese-Turkish nuclear power plant at Sinop, on the Black Sea coast, pulled out of the deal.

The investor, Japanese trading firm Itochu, cited huge cost overruns. That is an understatement, given that the cost of the project has ballooned to some US$46 billion – more than two and a half times the original projection of $18 billion.

It was a serious blow to Japan’s ambition to revive nuclear power exports; the contract will now require, at the very least, some major revisions.

But one might wonder why Japan even has a nuclear power export program, considering it has been bearing a colossal cross since the March 11, 2011, triple meltdown at the Fukushima Daiichi nuclear power plant complex.

Nuclear plants: viable exports?

Yet according to Prime Minister Shinzo Abe, nuclear power sales remain a core component of Tokyo’s broad strategic trading and political goals, as shown by his constant refrain that “Japan is back.”

The premier has traveled to more than 70 countries during his five years in office. He usually takes with him an entourage of businessmen eager to cement deals with foreign concerns, for which prior groundwork has been laid. The nuclear power plant project in Turkey stems from a deal signed by Abe and his Turkish counterpart in 2013.

The PM can sweeten deals by offering to package them with Japanese technology. For example, on foreign visits, Abe frequently extols Japan’s expertise in building high-speed rail networks. And of course, other counties do the same thing: The Russians, for example, like to offer military hardware.

Back home, Japan’s main nuclear power plant vendors, Toshiba, Hitachi and Mitsubishi Heavy Industries, have no choice but to seek out foreign markets: For all practical purposes, the domestic market no longer exists.

In today’s Japan, one is more likely to read about utilities that are to be torn down than new ones going up. Too many nuclear investments have become unprofitable due to stringent post-Fukushima safety regulations.

Japan now has 46 technically operable nuclear power plants, down from 54 before the accident. At present, seven units have passed safety reviews and been restarted, 24 are under review and 15 are slated for decommissioning.

Going global, going critical

From a global perspective, however, the situation is more encouraging. Some of the best prospects for Japanese nuclear technology are in the Middle East – where Abe just visited. Turkey is planning three complexes. Elsewhere, Saudi Arabia has ambitious plans to build as many as 16 nuclear power plants. The smaller Persian Gulf states also have plans.

The Japanese face considerable competition from the Russians, the French, the Chinese and even the South Koreans, who stunned Japan by winning a contract to build four units for the United Arab Emirates in 2010. The first one started loading fuel this month.

Southeast Asia presents other market opportunities. These include the delayed two-unit project in Vietnam. The Philippines is reportedly pondering whether to revive its one nuclear power plant at Bataan, mothballed years ago by the Corazon Acquino government.

Japan has yet to see a post-Fukushima nuclear sale project through to completion despite a clear international demand. It suffers from both the lingering aftereffects of the traumatic nuclear disaster and from a disorganized approach to export sales.

The Japanese were much impressed with what came to be called the “Korea model.” The model was built around the single state-owned Korea Electric Power Co, which builds and operates the country’s 20 reactors.

The ability to offer, in effect, a one-stop service was a key factor in winning the UAE contract. The UAE is totally devoid of any nuclear power expertise and has to depend totally on Koreans and other sub-contracted foreigners to build and operate the plant.

For their part, the Japanese vendors’ best strategy comes from tie-ups with foreign corporations. However, this has proven to be disappointing. Toshiba purchased the American firm Westinghouse in 2006 before the huge cost-overruns at several American plants forced Westinghouse to declare bankruptcy.

The net effect was to crush Toshiba’s competitive position in the export market and bring the vendor to the brink of bankruptcy itself.

A bright future? Build ’em up, tear ’em down

One bright spot: the state-owned Japan Bank for International Cooperation has resumed guaranteeing Japan nuclear projects after suspending operations for several years in the wake of the Fukushima disaster. It was to provide most of the funding for the Turkish project.

Whether Japan can revive projects depends heavily on internal politics. Former Prime Minister Naoto Kan was an unabashed salesman for Japanese nuclear technology until the Fukushima disaster, which happened on his watch. He has since become a major critic of nuclear power.

Abe is eager to use his influence as a nuclear power salesman, but he is beset with domestic scandals which have seriously weakened his prospects of a earning a third term this September.

At the least, he can expect to be challenged for the leadership. One of the logical candidates would be Foreign Minister Taro Kono, who is a vocal opponent of nuclear power within the Liberal Democratic party.

Still, there is a bright side even to denuclearizing. Due to the Fukushima disaster, Japan is in a position to become a major exporter of decommissioning expertise.

After all, some 15 units are slated for decommissioning over the next few decades, not to mention the extraordinary problems involved in decommissioning the Fukushima plants. Nobody, now, has the kind of hands-on experience that Japan will be able to boast about if and when that work is completed.

Still, there is an upside. In the long run, Japan Inc may wind up earning more from tearing down nuclear power plants than in building them.