Westinghouse is “unlikely to carry out actual construction work for the future nuclear power plant projects to eliminate risk.” Satoshi Tsunakawa, President and CEO of Toshiba, the Japanese company that owns Westinghouse and its CB&I Stone Webster subsidiary, made that statement during a recent press conference. The event, held on January 27, was called to provide a status report for restructuring actions first announced on December 27, 2016. The restructuring is required as a result of the growing realization that the value of Westinghouse’s CB&I Stone and Webster subsidiary is probably several hundred billion yen (several billion dollars) less than its current book value. Adjusting the company’s stated value with its real value will require taking a write off of “goodwill.” Though there is plenty of blame to go around for the cost overruns, several major regulatory changes have been significant drivers. Some of those decisions are so far in the past that they have been largely forgotten. One of those changes happened more than a decade ago, soon after the contracts were signed for the four AP1000 units currently under construction. The NRC determined that all reactors whose construction had not already started would be required to meet the newly issued Aircraft Impact Rule. That decision, which regulators apparently justified based on a belief that design changes before construction actually starts are cheap, inserted an unexpectedly large uncertainty into the project. The contract terms, pricing and schedule were based on the design that had received NRC certification in May 2006. The design revisions required to meet the Aircraft Rule changes involved at least three more design revisions that did not get final approval until Jan 2012. Completely different construction techniques needed to be invented, tested, litigated and approved. No reasonable and experienced construction estimator would fail to recognize the impact on project costs and schedules resulting from such a major change. Unfortunately, there were apparently few such people involved in the high-level contract negotiations, corporate strategic decisions and in the public communications effort.
Forbes 29th Jan 2017 read more »
Japanese electronics conglomerate Toshiba Corp – owner of Westinghouse and its CB&I Stone & Webster subsidiary – is to review its nuclear reactor construction business outside of Japan, the company’s president and CEO has said.
World Nuclear News 30th Jan 2017 read more »