AREVA covers up extent of massive nuclear reactor cost overrun

http://www.greenpeace.org/international/en/news/Blogs/nuclear-reaction/areva-covers-up-extent-of-massive-nuclear-rea/blog/12548

AREVA covers up extent of massive nuclear reactor cost overrun
Blogpost by jmckeati - June 24, 2010

French nuclear giant AREVA were force to issue a profit warning yesterday. It has had to find an extra 400 million euros to cover the additional costs of building its so-called flagship European Pressurised Reactor at Olkiluoto in Finland. This is on top of 2.3 billion euro provisions put aside in previous years and brings the current estimated overrun to an eye-watering 2.7 billion euros. The initial cost of the project was 3.2 billion euros.

While the rocketing costs of the OL3 EPR have dragged down AREVA's results for years, this is the first time that they have sent the company into the red. The company’s financial health has already been suffering thanks to the Olkiluoto project, as it struggles to build up its reserves for planned future investments.

But that’s not the end of it. This announcement of another enormous cost overrun will not be the last.

This newly announced 400 million is based on the assumption that OL3 will be operational by end of 2012 and not the middle of 2012. However, it became clear last week that the end of 2012 milestone will - at best - be completion date for construction. It will then take at least another six months before the newly finished power plant can go into commercial operation. That would mean roughly another extra 400 million euros being added to the project’s budget.

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