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Nuclear meltdown in Finland

This is the radioactivity-free kind of meltdown, as Helsingin Sanomat reported:

The Finnish nuclear power company Teollisuuden Voima (TVO) is seeking damages of EUR 2,400 million from the consortium of Areva and Siemens for delays in the construction of Finland’s fifth nuclear reactor in Olkiluoto.

Makes one look forward to what might happen if a truly litigous country had a major nuclear Renaissance fueled by, say, taxpayer money (see The nuclear bomb in the Senate stimulus plan).

The Finnish newspaper has a great photo of “The Olkiluoto III nuclear reactor construction site in December 2008.”

Here are more details on the meltdown between the partners in this debacle:

Areva and Siemens reported some time ago that the nuclear reactor project would be completed 38 months behind schedule, in 2012. According to the contract signed with TVO, the reactor was to have been ready for commissioning in 2009.

TVO signed an agreement for the third Olkiluoto plant in December 2003. The price of the reactor was in excess of EUR 3 billion, making it among Finland’s largest-ever individual industrial investments.According to the Siemens statement: “Since the reasons for the delay are disputed by the parties, the supplier consortium filed a request for arbitration in December 2008 against TVO demanding an extension of time for construction and approximately EUR 1 billion for outstanding payments and additional compensation.”“TVO has not yet filed its response to the request for arbitration, but has alleged in pre-arbitral correspondence that it is entitled to delay damages from the supplier consortium of approximately EUR 2.4 billion.”The contract for the 1600 MW European Pressurized water Reactor (EPR) at Olkiluoto, the first of a new breed of nuclear plants, was made at a fixed price.Areva and Siemens are building the facility as a turnkey project for TVO.

I think that last sentence may have a typo from a bad translation. The word “turnkey” seems to have an extra “n” (see “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour”).

The Siemens share of the venture is 27%, and hence the company’s liability for the claim by TVO would be in the region of EUR 700 million, while Areva would be liable to pay EUR 1.7 billion.

Guess this will get settled in Really Large Claims Court. I can hardly wait for the inevitable string of such lawsuits in this country if we go down this path (see “Warning to taxpayers, investors — Part 2: Nukes may become troubled assets, ruin credit ratings”).

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For more on the Finnish nuclear meltdown, see Satanic nukes? Finnish plant’s cost overruns to $6.66 billion and the Washington Monthly article Bad Reactors.

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