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Finland Project Management Roundup

REPORT

Two Big Nuclear Power Projects; Two Big Public Transportation Projects

By Jouko Vaskimo

International Correspondent & Senior Contributing Editor

Espoo, Finland


INTRODUCTION

This roundup introduces four large projects currently going on in Finland: Two in the nuclear power business area, and two in the public transportation business area.

OLKILUOTO 3

The Olkiluoto 3 nuclear power plant, a 1 600 MW unit, contracted to be built by Areva for Teollisuuden Voima (TVO) at Olkiluoto at the west cost of Finland, remains in its final stage of construction. The contract for building the 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 share – majority – 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.

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In the photograph: Olkiluoto 3 nuclear power plant is nearing completion despite the delay penalty dispute between Areva and TVO (photo courtesy www.stuk.fi)

HANHIKIVI 1

The Hanhikivi 1 nuclear power plant, a 1 200 MW unit, contracted to be built by Rosatom for Fennovoima at Pyhäjoki at the west coast of Finland, is proceeding full speed with the preliminary ground works. A preliminary approval to construct the plant was granted by the Finnish Government in April 2010, and by the Finnish Parliament in July 2010. The decision to invest in the power plant was made by Voimayhtiö SF, the largest owner of Fennovoima, in February 2014. The preliminary ground works for the plant are already under way, however, the final permit to construct the plant – applied for by Fennovoima in June 2015 – is expected to be granted by the Finnish Government no earlier than 2018. The plant is expected to go on line in 2024.

More…

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About the Author

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Jouko Vaskimo

Espoo, Finland

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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 www.linkedin.com/in/jouko-vaskimo-6285b51 .

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