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Work on Olkiluoto 3 could come to a grinding halt, warns Areva TVO said that it was surprised by a recent announcement from Areva that work on the Olkiluoto 3 nuclear power plant could stop unless a number of contractual issues were resolved. The Finnish utility said that work at the site was continuing and that Areva had not informed it of any conditions for the discontinuation of work. However, Areva said in its results for the first half of 2009 that it had sent TVO documents detailing proposals for the execution of the final phase of the project. The French engineering firm, which is building Olkiluoto 3 in consortium with Siemens, said it would only start on the final phase of construction if TVO agreed to its proposals or issues "contract amendments that provide for the requested modifications, both in terms of costs and time lines". Areva made a EUR550 million provision in the first half of 2009 to cover additional costs incurred on the project and "risk related to TVO's ability to adapt to the working methods necessary to continue the works". "We were surprised to read the information Areva released," said Jarmo Tanhua, President and CEO of TVO. "TVO has complied with the plant contract and valid nuclear safety methods and expects also Areva to do so. The schedule for the construction site is challenging and Areva's public speculation about stopping the works does not make it any easier to keep to it." Earlier this week the Areva-Siemens consortium building the plant announced that a milestone had been reached with the installation of the reactor building dome. The fitting of this 210 ton structure marks the end of the civil works phase and the start of the erection phase, entailing the installation of pipes and commissioning. The 1,600MW plant is one of the world's first EPR-based power plants but has been dogged by delays, which Areva maintains, have been caused by TVO. "The fact that the client TVO has not yet implemented the specific measures for speeding up the work, which were agreed upon in June 2008, is causing delays and additional costs," said Areva chief executive Anne Lauvergeon. "Areva has sent proposals to TVO in order to get back to methods of execution that are in line with usual practices for major projects." The Areva-Siemens consortium has already sent TVO claims amounting to EUR1 billion for delays and additional costs that have been incurred on the project. It is also preparing additional claims, and Areva says that work at the site is "progressing significantly slower than planned due to the inadequate resources deployed by TVO to fulfil their contractual commitments and in particular respecting the deadlines for processing the documents that have been delivered". TVO maintains that the Areva-Siemens consortium is responsible for the construction and commissioning of the plant and for the project schedule under the terms of the fixed-price turnkey contract. Earlier in 2009 it expressed disappointment that Areva-Siemens had not been able to accelerate work at the site and reduce delays. Areva-Siemens initiated arbitration proceedings over the delays in late 2008. Source: Utility Week © Faversham House Group Ltd 2009. News articles may be copied or forwarded
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