12 Mar (NucNet): Teollisuuden Voima Oyj has signed a settlement agreement with the companies supplying the Olkiluoto-3 EPR unit in Finland which includes compensation of €450m ($553m) to be paid in two installments, TVO said in a statement on 11 March 2018.
The compensation settles arbitration with the International Chamber of Commerce (ICC) concerning costs and losses caused by the delay of the project, TVO said. Construction of the unit is nine years behind schedule.
The supplier consortium companies are Areva NP, Areva GmbH and Siemens AG, and Areva Group parent company Areva SA, which is wholly owned by the French State.
TVO said the agreement is subject to conditions that are expected to be met during March 2018. It is not certain, therefore, that the settlement agreement will actually effect, TVO said.
TVO said it expects to receive the first payment of €328m in March 2018 and the second of €122m upon completion of the plant or on 31 December 2019 at the latest. TVO said it would make a provision of €150m for the maximum incentive payment payable to the supplier consortium companies for completion of project on schedule.
The company said the agreement means all legal action related to the Olkuliuoto-3 project, including the ICC arbitration, will be withdrawn.
The agreement also stipulates that the supplier consortium companies will receive an incentive payment of up to €150m if Olkuliuoto-3 is completed on time. If Olkuliuoto-3 is not completed on time, the supplier companies will pay a penalty to TVO of a maximum of €400m.
The agreement notes that the plant supplier’s most recent schedule is for regular electricity production to begin at Olkuliuoto-3 in May 2019.
Press report have said the project’s costs have increased from an initial estimate of €3.2bn to around €8.5bn, although TVO said today its total investment in the project will be €5.5bn.
