German electrical engineer Siemens and French nuclear specialist Areva have agreed to pay €450m to Finnish nuclear company Teollisuuden Voima (TVO) to compensate it for delays in the construction of the Olkiluoto 3 nuclear power plant, Areva said on Sunday.
Once Areva pays TVO, TVO will then pay Areva and Siemens €150m if they complete the project by May 2019. If they do not, then a further penalty of €400m will be payable.
The deal brings to an end a long-running dispute over the reactor, which was originally scheduled to come on line in 2010 after a five-year construction period. The project was hit by a series of delays caused by alleged defects. Â
Olkiluoto 3 was to have been the first in a series of European pressurised water reactors (EPRs) supplied by Areva.
The delays, and the tripling of cost estimates to $8.5bn, led to a dispute in the International Court of Arbitration. In this, TVO was claiming €1.8bn from Areva and Areva was claiming €3.4bn from TVO, a sum that included interest on unpaid invoices.
The agreement was in effect a late out-of-court settlement, which cut short the legal proceedings in Paris.
Philippe Soulie, Areva’s chief executive, said in a press statement: "All parties wanted to find an alternative settlement to the arbitration. This settlement will allow us all to refocus all our resources and energy towards completion of this new EPR.
"In less than 18 months, OL3 will deliver 1,650 MW to the Finnish electricity grid, with the highest safety standards in the nuclear world and zero carbon dioxide."
Philippe Varin, chairman of Areva, added that the settlement was "a milestone in the restructuring of the French nuclear industry".
Image: The Olkiluoto nuclear power station in the Gulf of Bothnia (Hannu Huovila/TVO)