Huge potential costs for OL3 delay
Billions of euros are involved in the arbitration between TVO and the Areva-Siemens consortium. TVO considers itself entitled to €2.4 billion in damages, while the consortium wants €1 billion for compensation and late payments.
Billions of euros are involved in the arbitration between TVO and the Areva-Siemens consortium. TVO considers itself entitled to €2.4 billion in damages, while the consortium wants €1 billion for compensation and late payments.
The official mention of the figures by Siemens as part of its first-quarter results for 2009 confirms reports that big money would be involved in the dispute.
Teollisuuden Voima Oyj (TVO) contracted the Areva-Siemens consortium to construct a 1600 MWe EPR reactor at Olkiluoto at the end of 2003. For €3 billion ($3.9 billion), the consortium was meant to complete the plant and hand it over to TVO this year. However, mid-2012 is now seen as the likely start-up date and neither party is happy. Areva has said that TVO is much too slow in processing documents and passing them on to the Radiation and Nuclear Safety Authority, Stuk, while TVO denies this.
According to a Siemens document, the constructing consortium filed a request for arbitration in December 2008 "demanding an extension of time for construction and approximately €1 billion ($1.3 billion) for outstanding payments and additional compensation." TVO has not responded to this yet, but "has alleged in pre-arbital correspondence that it is entitled to delay damages of approximately €2.4 billion ($3.1 billion)," Siemens said.
The information was revealed on 27 January in documents relating to Siemens first-quarter results for 2009, but was overshadowed by the announcement that the company plans to sell its 34% stake in Areva's reactor business.
Siemens' task in the Olkiluoto 3 project covers the construction and components of the conventional island of the power unit - the non-nuclear section in which power is generated from a supply of high-pressure steam created in the reactor building. This accounts for about 27% of the overall scope of the construction and is reported by TVO to be on schedule, with all major components in place.
Since arbitration began, the public spat has worsened, with TVO issuing highly critical statements to the press. For example: "TVO is extremely disappointed that the consortium has not, regardless of its responsibility as turnkey supplier and its earlier promises, been able to complete the works on time or to mitigate its delays through effective acceleration measures. TVO totally rejects the consortium's accusations that TVO has any responsibility for the delay."
