More delays as Finnish nuclear blame game continues

The difficulties that continue to plague Finland’s Olkiluoto 3 nuclear reactor means the power plant may not be operational until 2018, nine years behind schedule and 13 years since construction commenced.

Finland‘s Teollisuuden Voima (TVO) is unable to estimate a start date for the reactor as the utility and supplier Areva (Euronext:à‚ CEI), already battling in court, blamed each other for more delays.

Early last year, TVO said the start might be delayed until 2016 but following the latest problems, Finnish daily Kauppalehti cited sources from the site saying the start-up of the reactor could be delayed until at least 2018 as work had slowed.

In addition there are budget implications to consider, as construction costs first put at $4.3bn, had by 2012 been estimated as closer to $11.6bn in overall costs.
Luc Oursel
Site manager Jouni Silvennoinen said TVO was still waiting for supplier Areva-Siemens to update its work schedule following a reduction of 400 workers at the site this year. TVO said the site currently has about 1000 workers.

Areva Finland has said it cut staff to focus its efforts on the most critical tasks, but TVO said more could be done.

At Areva’s recent earnings presentation, chief executive Luc Oursel (pictured) gave no completion date but said work was 86 per cent done. He blamed delays on “excessive influence of lawyers”.

Mr Oursel insisted that “TVO is a client which is no doubt a bit too much influenced by its lawyers about how to handle this project. It is holding to an extremely strict contractual framework.” In an interview with Reuters, Oursel said Olkiluoto 3 was now going into the test phase and that TVO needed to be closely involved at this stage.

“It is one of the biggest conflicts in the history of the construction sector,” Areva Chief Operating Officer Philippe Knoche told reporters on Wednesday.

He added the Olkiluoto problems were due to the relationship with the client, the Finnish regulatory framework and the lack of maturity of the supply chain.

The International Chamber of Commerce’s arbitration court is processing a dispute on cost overruns, and Areva-Siemens has raised its compensation claim against TVO to $3.7bn.

TVO, owned by Finnish firms including Fortum, UPM-Kymmene and Stora Enso, has submitted a counter claim of $2.4bn.

Asked about the risk to Areva’s reputation of a conflict with a client, Oursel said the two EPRs being built in Taishan, China were on budget and on schedule and that Britain’s choice of two EPR reactors at Hinkley Point proved the problem was not with its reactor design.

“The EPR is seen as a good technology, and the problems we experience are more and more specifically Finnish,” Oursel added.

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