Suppliers raise Olkiluoto 3 damages claim

31 October 2013

UPDATED: This story was updated on 5 December 2013 to reflect the corrected amount of Areva-Siemens' claim against TVO.

The Areva-Siemens consortium has increased its claim against Finnish utility Teollisuuden Voima Oyj (TVO) to €2.7 billion ($3.7 billion) in relation to the delay and cost overruns of the Olkiluoto EPR.

Olkiluoto 3 - October 2013 460 (Areva)
The first-of-a-kind EPR at Olkiluoto (Image: Areva)

The consortium has submitted an updated claim to the International Chamber of Commerce (ICC) for damages up to the end of June 2011. Areva-Siemens had previously sought damages of €1.9 billion ($2.6 billion) from TVO. This updated claim includes around €70 million ($95 million) of payments delayed by TVO under the construction contract, some €700 million ($953 million) of penalty interest and €120 million ($163 million) of alleged loss of profit.

In the first half of 2008, TVO submitted a claim to Areva-Siemens for compensation for "losses and costs incurred due to the delay" in completing the construction project. TVO has also rejected a claim presented to it by Areva-Siemens that it had itself caused some delays in the plant's construction. Arbitration by the ICC was sought in December 2008.

TVO senior vice president Risto Siilos in charge of legal affairs noted, "We have a fixed-price turnkey contract under which the supplier has committed to deliver a nuclear power plant unit according to the contract fulfilling the Finnish safety standards." He added, "According to the plant contract the supplier is responsible for the delay and the ensuing costs."

The company noted that proceedings with the international arbitration court "may continue for several years and the claimed amounts may be updated."

At the end of 2003, TVO signed a turnkey contract with Areva-Siemens for the construction of the first-of-a-kind EPR nuclear power unit as the third unit at Olkiluoto. Construction started on the plant in May 2005, with completion originally scheduled for 2009.

However, the project has been beset by a mix of delays which have seen the startup date pushed back. TVO says that the plant may not now start regular electricity production until 2016.

Areva-Siemens' 29 October filing initially contained an incorrect total for the claim of €2.6 billion ($3.5 billion), which was subsequently updated to €2.7 billion.

Researched and written
by World Nuclear News

Filed under: Construction, Contracts, Finland