The Areva-Siemens consortium has updated its arbitration claim against Finnish utility Teollisuuden Voima Oyj (TVO) to some €3.52 billion ($3.96 billion). The claim relates to delays in the construction of the first-of-a-kind EPR unit at Olkiluoto.
|The Olkiluoto EPR, pictured in December 2015 (Image: TVO)
The consortium began construction of Olkiluoto 3 in 2005 under a turnkey contract signed with TVO in late 2003. Completion of the 1600 MWe reactor was originally scheduled for 2009, but the first project has suffered various delays and setbacks.
The ongoing arbitration proceedings through the International Chamber of Commerce (ICC) were initiated by the supplier consortium in December 2008. In 2012, TVO made a claim against the Areva-Siemens consortium under the arbitration proceedings.
Both parties have since made a number of revisions to their respective claims. Last July, the Areva-Siemens consortium increased the amount of compensation it was seeking from TVO to about €3.4 billion. That claim covered the period up to the end of June 2011 and included penalty interest (calculated until the end of July 2015) and payments allegedly delayed by TVO totalling some €1.4 billion and about €140 million in alleged loss of profit.
Also in July 2015, TVO estimated that its costs and losses resulting from the delay in completing Olkiluoto 3 up to December 2018 - the latest expected date for Olkiluoto 3 to begin supplying electricity - will total some €2.6 billion.
The Areva-Siemens consortium's latest claim is based on its updated analysis of events that occurred up to September 2014, with certain claims quantified to the end of December 2014. The sum includes penalty interest (calculated to the end of June 2016) and payments allegedly delayed by TVO under the plant contract totalling about €1.45 billion, as well as some €135 million in alleged loss of profit.
In a statement yesterday, TVO said it has "considered and found the earlier claims by the supplier to be without merit, and will scrutinize the updated claim". It noted that the arbitration proceedings may continue for several years.
TVO senior vice president Risto Siilos in charge of legal affairs noted, "Despite the arbitration, the project progresses and has reached its final phases. Testing of the various systems is going on in Olkiluoto and TVO continues to support the supplier to complete the remaining tasks. According to the schedule updated by the supplier in September 2014, regular electricity production in the unit will commence at the end of 2018."
TVO maintains that as Olkiluoto 3 is being built under a fixed-price turnkey contract, the supplier consortium companies are "jointly and severally liable for their obligations under the contract". However, Areva-Siemens claims that TVO had itself caused some delays in the plant's construction.
Researched and written
by World Nuclear News