The Olkiluoto Nuclear Power Plant’s third reactor has been under construction since 2005. It is currently expected to be completed by the end of 2019, exactly ten years behind the original schedule.
Areva, a French state-owned nuclear energy company, has agreed to pay 450 million euros in compensation to Teollisuuden Voima (TVO) for delays in the construction of Olkiluoto 3, the third nuclear reactor at the Olkiluoto Nuclear Power Plant.
The parties to the dispute have agreed to withdraw all ongoing legal actions related to the delay-ridden project, including their arbitration process at the International Chamber of Commerce (ICC).
TVO on Sunday confirmed earlier media reports that it has reached a settlement agreement with the plant suppliers, Areva and Siemens.
The agreement also stipulates that the suppliers will be entitled to an incentive payment of a maximum of 150 million euros if the nuclear power plant is completed on schedule by the end of 2019. The suppliers, on the other hand, will be liable for an additional penalty payment of 400 million euros if the project is delayed further.
Jarmo Tanhua, the CEO of TVO, says the nuclear power company is pleased with the agreement because it not only guarantees the financial, technical and human resources necessary for the successful completion and start-up of the nuclear reactor, but also settles other outstanding issues with the suppliers.
“We very much look forward to working closely with our partners to fully implement this agreement and to promptly accomplish the several crucial [...] steps leading to the start of regular electricity production of the unit,” he tells in a press release.
TVO also underlines that the settlement agreement will enter into effect only if certain conditions are met by the end of March.
The Finnish nuclear power company will receive the first, 328-million-euro instalment of the compensation payment after the agreement has entered into effect and the second instalment of 122 million euros after the completion of the project, but no later than 31 December, 2019.
Areva agreed to build the nuclear reactor for three billion euros in 2003, but the project’s costs have since nearly doubled to 5.5 billion euros due to a series of delays, making it one of the most expensive construction projects in the world. The nuclear unit was originally expected to be completed in 2009.
