March 11, 2018 / 7:05 PM / 12 days ago

Areva-led consortium to pay $554 million, settling Finnish reactor dispute

HELSINKI/PARIS (Reuters) - France’s Areva (ARVCF.PK) and Germany’s Siemens (SIEGn.DE) will pay 450 million euros (£400 million) for cost overruns and delays at a nuclear reactor which they are building for Teollisuuden Voima (TVO) in Finland, settling a long-running dispute.

FILE PHOTO: A Teollisuuden Voima (TVO) specialist works inside Olkiluoto-3 nuclear reactor control room in Eurajoki, Finland August 17, 2017. REUTERS/Lefteris Karagiannopoulos

Originally planned to begin production in 2009, the Olkiluoto 3 plant is still not completed, and suppliers and TVO have claimed billions of euros from each other at an arbitration court.

Following the deal, the companies said they would withdraw all ongoing legal actions.

“TVO welcomes the agreement which ensures that the OL3 EPR project continues to have the necessary financial, technical and human resources for the completion and successful start-up of the plant,” TVO President Jarmo Tanhua said in a statement.

Areva said it will secure all resources necessary to complete the plant which is expected to start in May 2019.

FILE PHOTO: The Olkiluoto (OL3) nuclear power plant is pictured in Eurajoki July 1, 2014. REUTERS/Jussi Nukari/Lehtikuva

A turnkey contract for Olkiluoto 3, signed in 2003, fixed the cost of the reactor at 3.2 billion euros. TVO said on Sunday that its overall investment will be around 5.5 billion euros.

Areva-Siemens had been claiming 3.6 billion euros from TVO while the Finnish company had filed a counter-claim of 2.6 billion euros.

    By the time of the agreement, TVO had won three partial rulings against Areva-Siemens from the International Chamber of Commerce’s arbitration court.

    Siemens’ role in the project was smaller than Areva’s.

    Olkiluoto 3, a European Pressurised Reactor (EPR), is set to become Finland’s fifth and largest nuclear unit and provide about 10 percent of the country’s power needs.

    TVO’s owners include Finnish paper companies UPM (UPM.HE) and Stora Enso (STERV.HE) as well as utility Fortum (FORTUM.HE).

    Reporting by Tuomas Forsell and Michel Rose; Editing by Jussi Rosendahl and Peter Graff

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