The arbitration claim by the Areva-Siemens consortium against Finnish utility Teollisuuden Voima Oyj (TVO) over delays in the construction of the EPR reactor at unit 3 of the Olkiluoto NPP (OL3) has been increased to €3.52bn ($3.96bn) from €3.4bn.
The consortium began construction of OL3 in 2005 under a turnkey contract signed with TVO in late 2003. Completion of the 1600MWe reactor was originally scheduled for 2009, but is now delayed by more than nine years and is significantly over budget.
Arbitration proceedings through the International Chamber of Commerce (ICC) were initiated by the consortium in December 2008, then in 2012, TVO made a counter claim against the Areva-Siemens. Both parties have since revised their claims several times. Last July, Areva-Siemens increased the amount of compensation it was seeking from TVO to 3.4bn covering the period up to the end of June 2011 including penalty interest (calculated until the end of July 2015) and payments allegedly delayed by TVO totalling some €1.4bn as well as about €140m in alleged loss of profit. Also in July, TVO estimated that its costs and losses resulting from the delay in completing Olkiluoto 3 up to December 2018 ( the current expected date for start-up) will total some €2.6bn.
The latest Areva-Siemens claim is based on an updated analysis of events up to September 2014, with certain claims quantified to the end of December 2014. The sum includes penalty interest (calculated to the end of June 2016) and payments allegedly delayed by TVO under the plant contract totalling about €1.45bn, as well as some €135m in alleged loss of profit. TVO said it has "considered and found the earlier claims by the supplier to be without merit, and will scrutinize the updated claim".
TVO senior vice president Risto Siilos in charge of legal affairs noted, "Despite the arbitration, the project progresses and has reached its final phases. Testing of the various systems is going on in Olkiluoto and TVO continues to support the supplier to complete the remaining tasks. According to the schedule updated by the supplier in September 2014, regular electricity production in the unit will commence at the end of 2018."
TVO says that as OL3 is being built under a fixed-price turnkey contract, the supplier consortium companies are "jointly and severally liable for their obligations under the contract". However, Areva-Siemens alleges that TVO caused some delays in the plant's construction. The arbitration process is expected to continue for some years.
