Finnish utility Teollisuuden Voima Oyj (TVO)—operator of the Olkiluoto 3 (OL3) nuclear power plant under construction in Finland, a project that could be the world’s first EPR reactor but that has faced costly delays—must release €125 million ($155 million) of withheld payments to an AREVA-Siemens consortium, an international arbitration court ordered last week.
In a partial judgment, the International Court of Arbitration of the International Chamber of Commerce, which comprises more than 100 members from about 90 countries, ruled that TVO must release €100 million ($124 million) to the consortium that was withheld in contravention of contractual provisions. The €125 million total factors in accrued interest and legal expenses incurred by the consortium.
At the end of 2003, TVO signed a €3 billion ($3.7 billion) turnkey contract with Areva-Siemens for construction of the first-of-a-kind EPR nuclear power unit designated as the third unit at Olkiluoto. Construction started on the plant in May 2005, with completion originally scheduled for 2009. Commercial operations at the $4 billion Olkiluoto 3 plant have been postponed until 2014 because the project has been consistently plagued with faulty materials and planning problems since construction began.
In 2008, TVO alleged the AREVA-Siemens consortium contracted to build the plant was “naturally responsible” for the time schedule and for the acceleration measures required for keeping the schedule, as well as liable for any possible cost increases resulting from the delay. AREVA argued that, confronted with construction delays, the consortium had convinced TVO that a number of measures were required to accelerate and improve the program, and that TVO was chiefly responsible for implementing those measures.
TVO said the court’s “decision takes no position on the delay of the plant unit and the cost resulting from the delay.” That matter will be taken up by the court when it rules on another claim filed in 2008.
TVO signed a €3 billion ($3.7 billion) turnkey contract with the AREVA-Siemens consortium for construction of the EPR at Olkiluoto. Siemens in 2009 quit the Franco-German nuclear joint venture, citing a “lack of exercising entrepreneurial influence.” In September 2011, Siemens announced it would quit the nuclear business altogether, prompted by the German government’s recent decision to phase out nuclear power in that country by 2022.
Sources: POWERnews, AREVA, TVO
—Sonal Patel, Senior Writer (@POWERmagazine)