Claims updated in Olkiluoto 3 delay arbitration

03 August 2015

Finnish utility Teollisuuden Voima Oyj (TVO) and the Areva-Siemens consortium have both increased the amounts claimed in arbitration over the delay in construction of the first-of-a-kind EPR at Olkiluoto.

Olkiluoto 3 - July 2015 - 460 (TVO)
Olkiluoto unit 3, pictured last month (Image: TVO)

Both TVO and the Areva-Siemens consortium updated their claimed amounts at the end of July in ongoing International Chamber of Commerce (ICC) arbitration proceedings, TVO said today in a statement.

TVO now estimates 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 ($2.8 billion).

Last October, TVO increased its estimate of its own costs and losses in relation to the arbitration claim to €2.3 billion ($2.5 billion) up to the end of 2018. In late 2012, it had estimated costs and losses of some €1.8 billion ($2.0 billion) up to the end of 2014.

Meanwhile, the Areva-Siemens consortium has increased the amount of compensation it is seeking from TVO to about €3.4 billion ($3.7 billion). Its claim covers the period up to the end of June 2011 and includes penalty interest (calculated until the end of July 2015) and payments allegedly delayed by TVO totalling some €1.4 billion ($1.5 billion) and about €140 million ($153 million) in alleged loss of profit.

The Areva-Siemens consortium earlier updated its arbitration claim against TVO to €3.4 billion ($3.7 billion) in October 2014. That amount included "over" €1.2 billion ($1.3 billion) of penalty interest calculated up to October 2014, payments allegedly delayed by TVO under the plant contract, and €150 million ($164 million) of lost profits. The consortium's claim, revised in late 2013, previously stood at €2.7 billion ($3.0 billion).

The Areva-Siemens consortium began construction of Olkiluoto 3 in 2005 under a turn-key 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 ICC were initiated by the supplier consortium in December 2008.

TVO says it will "scrutinize" the new material submitted to the ICC and says it will respond in due course. However, it continues to consider the Areva-Siemens consortium's claims "to be without merit and has not recorded any receivables or provisions based on the claims presented to date". It noted that the arbitration proceedings may continue for several years and the amounts claimed may be further updated.

TVO senior vice president Risto Siilos in charge of legal affairs noted, "Despite the arbitration, the project makes progress and TVO continues to support the supplier to complete the project."

Researched and written
by World Nuclear News