Areva faces 50 pct cost rise for Finnish nuclear reactor: report

Thursday, August 28, 2008

PARIS (AFP) — French nuclear group Areva is facing a 50 percent rise to the cost of building the world's first next-generation pressurised water reactor in Finland, the business daily Les Echos reported Thursday.

The cost of constructing the plant at Olkiluoto has risen from three billion to 4.5 billion euros (6.7 billion dollars), the paper reported citing an unidentified source.

The increase was due not only to the global rise in prices, but Areva's having to send in additional workers to "ensure work proceeds better," the report said.

Finnish nuclear safety agency STUK launched a probe earlier this month into whether safety procedures were respected at the site after Greenpeace disclosed confidential documents indicating there were no qualified personnel supervising the welding and that the quality of the welding had not been verified.

Areva has been forced to set aside one billion euro in provisions to absorb the rise in costs, the newspaper said, but the company will still announce Friday record profits of nearly 750 million euros.

Construction delays have already forced Areva to push back the target date for the reactor to enter service to 2011 from 2009.

Posted in |