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Olkiluoto 3 compensation war rages on; Areva now wants 3.5b in damages

Inflamed relations between the supplier and operator of the long-delayed Olkiluoto 3 nuclear power plant worsened this week as both sides upped the ante in their ongoing compensation battle. Earlier this week TVO ratcheted up estimated costs and losses due to project delays to 2.3 billion euros, while Areva’s new claim reached 3.5 billion euros Friday.

Arevan logo.
Image: Daniel Karmann / EPA

The Finnish power consortium Teollisuuden Voima TVO said earlier this week that it submitted a revised estimate of compensation costs to the International Chamber of Commerce last week.

In its filing, TVO estimated costs and losses at 2.3 billion euros up to the end of 2018, based on the recent announcement of a commissioning date by the French nuclear contractor Areva.

In late 2012 TVO had totted up costs and losses at 1.8 billion euros to the end of 2014.

In its turn, Areva has fought fire with fire, slapping TVO with its own counter-claims covering delayed payments, related interest penalties and alleged loss of profits.

As of the end of 2013, that claim had reached 2.7 billion euros. However on Friday, TVO announced that Areva had increased its claim to 3.5 billion euros to cover events up to the summer of 2011.

One of the world's most expensive structures

TVO has repeatedly spurned Areva’s demands for compensation, pointing to its poor management of the project schedule and resulting delays and cost overruns.

According to some estimates, Areva has had to absorb more than five billion euros in additional costs, having promised to deliver the reactor at a fixed cost of three billion euros.

At the end of 2012, Areva estimated that the reactor had cost some 8.5 billion euros up to that point, making it one of the most expensive structures in the world, critics say.

TVO and Areva have locked horns over responsibility for delays in the construction of the belated number three reactor for years. The ongoing dispute is being arbitrated by the ICC.

Construction began on the number three reactor at the Olkiluoto nuclear power plant in southwest Finland in 2005. The plant was due for completion in 2009 but had lagged badly as a result of constantly shifting deadlines.

Earlier this month TVO said that according to a new timetable received from Areva, the reactor should be ready for commissioning by the end of 2018 – nine years after the original schedule.

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