Russia’s Rosatom to demand compensation for “unlawful” termination of Finnish nuclear contract

Fennovoima’s visualisation of the Hanhikivi 1 nuclear power plant (Fennovoima/Creative Commons/CC BY-SA 2.0)
The Rosatom subsidiary building the Hanhikivi 1 nuclear power plant in Finland has said it would demand compensation after Finnish consortium Fennovoima canceled the contract earlier this month.

RAOS Project, subsidiary of Rosatom Energy International, which is a division of Rosatom State Corporation, called the decision political and offered to restart work when conditions allowed.

“In the meantime, we have no other choice but to defend ourselves and demand compensation for this unlawful termination,” it said in a statement released Friday, 6 May.

RAOS did not give a figure for the compensation it would seek.

Where other companies have justified leaving Russia or cancelling projects with Russian partners on moral grounds over Russian President Vladimir Putin’s invasion of Ukraine, Fennovoima – a consortium including Finnish industrial firms and municipal energy companies – claimed it cancelled Hanhikivi 1 because RAOS Project was unable to deliver, citing “significant and growing delays during the last years”.

Fennovoima added: “The war in Ukraine has worsened the risks for the project. RAOS has been unable to mitigate any of the risks.”

But the RAOS statement disputes that, saying RAOS delivered all necessary safety and design documentation at the end of 2021 “in accordance with the agreed updated schedule”. Fennovoima, RAOS said, accepted its safety assessment in January 2022 but has delayed submitting it to Finland’s nuclear safety authority, STUK, because Fennovoima’s own safety assessment was behind schedule.

“RAOS Project has done everything in its power to expedite this work, but to ensure the required independence of the license applicant Fennovoima, [RAOS] can not by law carry out these important responsibilities,” the statement said.

RAOS further pointed out that it was currently building 15 reactors in Russia, China, India, Bangladesh, Belarus and Turkey, involving reactors of “essentially the same type as Hanhikivi 1”, and that work on them was progressing well.

Of the war risks, RAOS said its parent company Rosatom had “sufficient resources and the necessary organisational flexibility to fulfil its contractual obligations even in a difficult current environment”.

It said it was considering plans for forging the reactor’s pressure vessel elsewhere than Ukraine’s Kramatorsk steel plant.

“The decision of the Finnish partners to terminate the Hanhikivi-1 NPP project is non-market and politically motivated,” RAOS said.

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