Construction delays at nuclear plant spark row over compensation

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Serious delays in the construction of Finland’s fifth commercial nuclear reactor have led to sharp disagreements between the Finnish energy company TVO and the French builder in the project, Areva, on the amount of compensation that the builder should be liable for.
      At a press conference in Olkiluoto where the reactor is being built, TVO’s Martin Landtman and Philippe Knoche, the head of the project for the Areva-Siemens consortium, did not want to take specific stands on the size of the fines to be paid, but both agreed that differences exist.
     
Construction of the new reactor, the third at the Olkiluoto plant on Finland’s west coast, is a year and a half behind schedule. Because of the delay, losses in TVO electricity production could reach up to EUR 600 million.
      Landtman emphasises that TVO has an unambiguous contract on the price and construction schedule for the plant, with items on fines for breaches, and mechanisms for resolving disputes, but that the content of the items is a business secret. "There is four years worth of construction work left, so what is most important now is to concentrate on it", Landtman notes.
     
In early December Knoche replaced the previous head of the project, Ulrich Giese. Knoche says that Areva-Siemens is not willing to pay full compensation for the delays. Both Knoche and Landtman emphasise that sticking to the new construction schedule is most important.
      The two emphasised that they are responsible for the construction project, and that the issue of possible contract violation fines is a matter for the lawyers.
      Knoche admits that the delays have also caused problems for the project’s subcontractors. He says that the original schedule may have been too challenging, noting that the installation is the first third-generation nuclear facility of its kind.
     
Last week cracks were found in the foundation of one of the cranes at the construction site, and it was decided that the whole crane should be dismantled. Knoche says that such unexpected setbacks might affect the schedule in the future as well.
     
Managing the numerous subcontractors at the extensive construction site is a challenge. Currently there are 1,070 workers at the building site, just under half of whom are Finns.
      "Finland’s good employment situation means that it is difficult for subcontractors to get Finnish employees", Landtman says. Of the foreign workers, 40 per cent are from Poland, 28 per cent are from Germany, and 18 per cent are from France.
     
TVO ordered its third unit on a turnkey basis, although the company itself originally contracted the first two units at the Olkiluoto plant, which were completed in 1978 and 1980.
      Landtman says that TVO decided on the present arrangement because it wants to focus on operating, rather than building nuclear power plants.


Previously in HS International Edition:
  Head of nuclear construction project says schedule may be too tight (18.12.2006)
  Further delay in construction of Olkiluoto-3 nuclear reactor (5.12.2006)
  Call for radical electricity market overhaul and sixth nuclear reactor (4.10.2006)

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