Arbitration over delays in nuclear build

05 January 2009

The row over delays at the Olkiluoto 3 new-build project has grown more serious after constructing consortium Areva-Siemens took their customer Teollisuuden Voima Oyj (TVO) to arbitration.


Better late than never? How Olkiluoto
will look when unit 3 (left) is complete

The two parties have exchanged grumpy words in public several times before over problems in executing the turnkey project, but now the disagreements are official.


In the first half of last year, 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, and it is this claim for which the consortium has filed a request for arbitration with the International Chamber of Commerce. Areva said that it initiated the proceedings on 5 December 2008; TVO announced that it had received notification on 30 December 2008.


TVO said details of the forthcoming process would be kept private but stuck to its guns: "TVO has a fixed-price, turnkey contract with Areva-Siemens for the construction of the Olkiluoto 3 unit." Areva said on 19 December that some delays were "caused by TVO."


At the end of 2003, TVO signed a €3 billion deal with Areva-Siemens for the construction of an EPR nuclear power unit at Olkiluoto. But as the first EPR project and the first significant nuclear build in the West for over a decade, progress has not been plain sailing.


For example, there were significant delays in 2005 after elevated levels of water in concrete could not be readily explained and the Finnish nuclear safety regulator, Stuk, ordered work to stop. Some large steel components had to be re-cast after subcontractors failed to fulfil the high standards demanded of a nuclear project.


On the other hand, Areva contests that TVO has been much slower than agreed in processing and passing on technical documents to Stuk, despite an agreement to speed this up.


Currently the 1600 MWe reactor is expected to start up in 2012, some three years later than originally planned. The turbine island of the plant has been virtually completed by Siemens with all main equipment installed in line with the original schedule, but the nuclear island is running late and work is still to start on the double containment structure.


TVO announced on 5 January that the reactor pressure vessel for Olkiuoto 3, which weighs in at 526 tonnes, had arrived on site. The main part of the vessel has made by Japan Steel Works, and its head by Mitsubishi Heavy Industries. This major component will be lifted into place through an equipment hatch once the reactor building's main crane is in place.