Kozloduy 5 & 6 upgrade

3 July 2003

The upgrading programme at Kozloduy 5 & 6 involved many plant modifications. As a result, a complex financing scheme and a number of organisational issues were implemented. By Nayden Naydenov and Oscar Mignone

The Kozloduy 5 and 6 modernisation programme is being carried out under the quality assurance requirements of the International Atomic Energy Agency (IAEA), the ISO and relevant national standards. Due to the complexity of the project, Kozloduy developed new procedures to regulate the programme and the main contractors. A project management manual and a quality assurance programme were developed specifically for the modernisation programme, integrating the different activities with the existing quality procedures and programmes from Kozloduy. The current status of the modification is summarised in the table below.

  Staff training programmes were carried out to ensure that all staff understood the programme and procedural requirements. This was necessary in order to disseminate quality principles and to enhance the quality culture applicable to this major modernisation programme.

The contractors' deliverables are made under their own internal quality programmes, and the respective quality plans were reviewed to ascertain that all quality steps were verified and controlled by authorised personnel. Contractors deviations from quality requirements were reflected in remarks prior to acceptance. In the case of persistent deviations, non-conformance reports were issued for corrective action. To date, the programme has had a record low of non-conformities. However, the documentation deliverables required rework by the contractors to meet the acceptability levels based on comments made by Kozloduy and the consultant Parsons E&C.

Lessons that had been learned were developed and implemented in plans with both the major contractors. In these plans, the activities and results of the work performed during the 2002 outages for the units were reviewed.


The licensing process for units 5 and 6 conforms to the three-step requirements that was defined by the Bulgarian Nuclear Regulatory Agency (BNRA).

In the first step, authorisations were requested by BNRA to start contract activities with the contractors, requiring the presentation of the contractor's company, the quality programmes and the list of potential suppliers. Suppliers and subcontractors qualified under ISO 9000 standards were preferred.

Once the major contractors received authorisation to proceed, the second step of the regulatory process was implemented. This related to permission to start the design and supply tasks, followed by submission of the measures' technical specifications and the related justification documents. The third step of the regulatory process was successfully achieved for measures implemented in 2002. The regulatory process for measures being implemented in 2003 is currently ongoing, through the submission of the technical solutions and, in some cases, of the contractors' accepted detail design packages.

Technical review and compliance

The technical review and compliance of the contractors' document deliverables is important to the modernisation programme. The process established by the participating organisations was based on a three-way review. This considered modernisation and investment, plant production and the consultant. The results of the review were summarised and presented in technical council meetings and in decisions that were taken by the meeting chairman for the acceptance of the deliverable or its devolution to the contractor for further enhancement.

The process allowed Kozloduy to create a balanced review concept, based on compliance with contract technical specifications, international and national standards and regulations, quality, safety, seismic and environmental requirements, as well as recognised engineering and construction practices.

Kozloduy took a proactive approach to communicate the results of the review to the contractors. The internal timeframes to review the contractors' deliverables were under the contract allowable times and were shorter whenever allowed by the workload.

Contractors have benefited from the sound engineering base created by Kozloduy, with assistance from Parsons. The comments and remarks made on the documents presented made a substantial contribution to achieving the desired compliance and enhancing the quality of the deliverables. These comments and remarks were essential to the feasibility of implementing the measures and to ensuring the satisfactory completion of the measures.

Communication and correspondence

The modernisation programme is characterised by interactive communication and correspondence among the project participants. Kozloduy's main role in the project management and organisation process makes it the focal point to receive and issue project-related correspondence. A project procedure was prepared to regulate this flow, which is based on a normalised numbering system permitting easy document classification, filing and retrieval.

The Modernisation and Investment Division is the single entry point for all contractors' correspondence. This ensures there is unified management and administration, to apply control techniques by tracking databases to ensure that correspondence is answered in an effective and timely manner.

Reviewing and answering contractors' correspondence is a key project issue that Kozloduy is handling with the maximum possible care. Contractors' letters may involve concerns about the technical scope, quality problems, questions and clarifications, planning and scheduling topics, contract issues, and price or financial considerations. Letters have to be answered thoroughly to avoid gaps that could have an impact on project development and completion.

Kozloduy has implemented a sound review process of contractors' correspondence, with the aim of ensuring project and contract compliance, and to avoid conflicts with the contractors.

There is a wide range of nationalities participating in the modernisation programme, including Bulgarian, Russian, US, German and French. The project is being closely scrutinised by the IAEA and the European Community. In addition, organisations from other nations, including the UK, Italy and Spain, are participating in the project as required.

The official languages for the programme are Bulgarian and English, which requires the need to translate contractors' deliverables and correspondence into both languages. This persuaded Kozloduy to create a Department for Communications and Documentation, which organises the translation activities and monitors the programme implementation.

Translations are also required to cover concepts and special terminology, which may have different engineering meanings in different countries. In addition, cultural barriers between different nationalities are slowly being broken down as a result of the joint work and common understanding of issues and problems.

Planning and scheduling

Planning and scheduling processes are of important to the modernisation programme. As the measures have to be installed in an operating nuclear plant, the installation times have to be contained within the durations of the outage windows. This means Kozloduy plant management have a delicate compromise to resolve; balancing the requirements of operating the units to generate revenues, and allocating sufficient time for modernisation activities.

Contractors' planning follows the phases laid out in the measures, composed of logical sequences of detailed design, procurement, factory acceptance tests, deliveries to site, installation and testing of new equipment and systems.

The contractors' schedules are tailored to suit the units' outage plans, based on the requirements of Bulgaria's predicted energy demand profile. In addition, the licensing process is superimposed on the schedules of measures.

In addition to the requirements of scheduling, control and monitoring, an important aspect of the planning process is the financial requirements of the programme. This derives from actual and forecast costs loaded in the Modernisation Programme Integrated Project Schedule. Due to the complexities of this schedule Primavera, a powerful high-end software, is being used.

Financial and cost control

As mentioned previously, a complex international financing scheme was devised for the modernisation programme, based on the following sources:

• Kozloduy's own resources, from its business and investment plan.

• Euratom loan agreement, to finance the activities of the European Community contractors.

• Roseximbank loan agreement to finance the activities of the Russian contractors.

• Eximbank-Citibank loan agreement to finance the activities of US contractors.

The modernisation programme's planned activities associated with their financial requirements give rise to the Modernisation Cash requirements, which are incorporated in Kozloduy's internal costs for the short-, medium- and long-term. These costs include loan interest and administration fees. Kozloduy's forecasted revenues will provide cash flow for future years.

The Modernisation and Investment Division, together with the Economic and Financial Division, play a major role in defining, supervising and following up the financial aspects of the modernisation. This ensures that there are no deviations from the budget, and that the eventual scope of adjustments are controlled and authorised prior to implementation.

Kozloduy and Parsons process detailed cost information, which is then summarised in a monthly cost report that is issued internally to Kozloduy and to both the Ministry of Energy and Energy Resources and the Ministry of Economics and Finance. Data on physical and economic progress are presented in the monthly cost reports, which are then monitored against the plan, with reasons being given for both positive and negative contributions on a monthly basis.

Other important reporting processes derived from the financial and cost control functions include:

• Euratom Borrower's Report, issued to Euratom in response to the requests for partial fund disbursements from the Euratom loan.

• Euratom's quarterly reports, prepared jointly by Kozloduy and Parsons, which are a compulsory requirement of Euratom's need to be informed about the progress and well-being of the programme.

The contractors' invoices follow a rigorous review and acceptance process, based on the verification of the completeness of the payable milestone technical scope, its conformity to the technical specifications, its opportunity of completion, the presence of the necessary or referred documentation, and the correctness of the amounts to be paid.


The modernisation programme imposed certain training requirements related to the preparation of the plant staff for the operation and maintenance of the new equipment and systems to be installed.

The main contractors make arrangements, and the agenda and training programmes are discussed and agreed with Kozloduy prior to the training programme. Operation and maintenance manuals are provided by the contractors as part of the document packages, and these are used as a basis for training the plant staff that did not attend the training courses at the premises of the original manufacturer.

A second type of training that has been applied in the modernisation programme is related to the teaching of the project functions to the personnel that have been assigned to the modernisation programme. This is a continuous form of training, and has covered project management, quality assurance, configuration management, planning and scheduling, and other topics as required.

Decision making

The decision making process' applicable to the modernisation programme are based on a multiple series of elements:

• Knowledge of Russian VVER reactors, Western PWRs, Russian, IAEA and NRC standards and regulations, engineering, construction and commissioning techniques.

• Information on state-of-the-art modernisation of VVER plants. This includes operational results of modifications that have been implemented in other plants, on case studies resulting from incidents and accidents, on the cost-effective upgrading techniques used in both the nuclear and non-nuclear power industries, and on manufacturers capabilities.

• Strategy on the development of the programme and Kozloduy's overall strategic plans. This includes interactions between power production and the grid, the application of contracts, the technical and economic benefits of the programme, and on the development of the capabilities of the staff.

• Expertise in national and international nuclear and conventional power project phases, such as conceptual design, detailed engineering, procurement, manufacturing, construction, testing, commissioning, operation and maintenance. Expertise in project and quality management, planning and scheduling, contract administration, budgeting, estimating and cost control.

The proposal for decision is prepared by Kozloduy's technical staff, assisted by the other project disciplines, in order to incorporate all the necessary elements for the proper evaluation of the scope, safety and quality, planning impacts, contract aspects and financial matters.

Technical council meetings are the usual project tool for gathering information from the various technical staff, and create the right basis for decision-making. In many cases, decisions on document deliverable acceptability are taken directly by the technical council chairman. Whenever the issues involve considerable responsibility in plant operation or financial impact, the proposals for decisions are submitted to the managers of the Modernisation and Investment Division or the Energy Production Division. If all the elements are sufficient for a sound decision to be made, it is made and implemented accordingly.

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