Finland Project Management Round Up – Sep 2016


Olkiluoto 3; Hanhikivi 1, Länsimetro extension, Raide-Jokeri project

By Dr. Jouko Vaskimo

International Correspondent & Senior Contributing Edito

Helsinki, Finland


This roundup continues the coverage of key projects currently going on in Finland: Two in the nuclear power business area, and two in the public transportation business area.


The 1 600 MW Olkiluoto 3 nuclear power plant, contracted to be built by Areva for Teollisuuden Voima (TVO) at Olkiluoto, remains in its final stage of construction. The process of settling Areva and TVO differences in an international court of arbitration has not reached a result. There appears to be a growing consensus in Finland that nuclear power is a way to take care of the transition from traditional to renewable power generation. Furthermore, the nuclear power industry is in a dinosaur-like position: If it is unable change with the times, it may face extinction. Finnish media has started providing an increasingly detailed coverage of the problems with the other Areva nuclear power plant endeavors, such as the new units for Flamanville, France, and Hinkley Point, UK. This adds to the challenge of the Olkiluoto 3 project PR operations.

The contract for building the Olkiluoto 3 power plant was signed in 2003 for 3 000 M€, and construction began in 2005, targeting completion in June 2009. Due to numerous challenges during the planning and construction phases, the target date has been pushed forward several times, first to 2015, and now to 2018 – nine years in total. According to Areva, the delays have pushed the total cost up to 8 500 M€.

Areva and TVO have conducted negotiations regarding the delay and related penalties, with TVO demanding 2 300 M€ from Areva, and Areva 3 500 M€ from TVO: Areva claims TVO has not carried out its contractual duties, and is therefore accountable for the costs of the string of delays. TVO claims Areva has failed to construct the power plant according to the contractual schedule, and is therefore accountable for the cost increase and for the loss of profit from selling electrical power to private and public customers. Unable to reach an acceptable solution, TVO and Areva have suspended negotiations, and escalated the dispute to international arbitration.

The matter is made more challenging by the French government plan to sell its majority share of Areva stock to Électricité de France (EDF) S.A. – the French electric utility company, largely owned by the French state, headquartered in Paris, France, with 65 200 M€ in revenues in 2010. EDF operates a diverse portfolio of over 120 GW of electrical power generation capacity in Europe, South America, North America, Asia, the Middle East and Africa. The French government would like to merge the loss-making Areva with EDF, however, EDF is unwilling to proceed with the proposed arrangement understanding the international arbitration may agree with TVO’s claims.


In the photograph: Olkiluoto 3 nuclear power plant – on the left – is nearing completion despite the Areva and TVO delay penalty dispute (photo courtesy www.wikipedia.org ).


The 1 200 MW Hanhikivi 1 nuclear power plant, contracted to be built by Rosatom for Fennovoima at Pyhäjoki, is proceeding with the preliminary ground works. Parallel to the preliminary ground works, the process of granting the main building permit is going on in the Finnish Ministry of Employment and the Economy. Due to the EU sanctions towards Russia, the Hanhikivi 1 plant has undoubtedly become a player in international politics. Many see the Rosatom three-way involvement in the Hanhikivi 1 project – being one of the main shareholders as well as the main contractor and the main equipment supplier – a way for Russia to get involved in EU matters. Some go as far as seeing the Rosatom involvement in the Hanhikivi 1 project as a way for Russia to strike a blow against a uniform EU sanction policy towards Russia. Setting aside the international politics, experts say the Hanhikivi 1 plant is unlikely to be able to produce electrical power at a price lower than the Teollisuuden Voima Olkiluoto 3 plant.


To read entire report, click here


About the Author

Dr. Jouko Vaskimo

Espoo, Finland



Jouko Vaskimo
is an International Correspondent and Senior Contributing Editor for PM World in Finland. Jouko graduated M.Sc. (Tech.) from Helsinki University of Technology in 1992, and D.Sc. (Tech.) from Aalto University in 2016. He has held several project management related positions with increasing levels for responsibility. Jouko holds a number of professional certificates in the field of project management, such as the IPMA Level C (Project Manager), IPMA Level B (Senior Project Manager), PMP, PRINCE2 Foundation, and PRINCE2 Practitioner. Jouko is also a Certified Scrum Master and SAFe Agilist.

Jouko is a member of the Project Management Association Finland, a founding member of PMI Finland Chapter, and the immediate past chairman of the Finnish IPMA Certification Body operating IPMA certification in Finland. Since October 2007, he has been heading the Finnish delegation to ISO/TC 258.

Jouko resides in Espoo, Finland and can be best contacted at [email protected] . For more information please navigate to https://pmworldjournal.net/article/sep-2016-project-management-update-buenos-aires/.

To view other works by Jouko Vaskimo, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/jouko-vaskimo/