British contractors Costain and Sir Robert McAlpine are expected join forces with two international construction giants in a bid to secure a significant portion of the UK’s £40 billion nuclear new build market.
Construction News understands the Costain/McAlpine/Hochtief joint venture – which is looking to target upcoming works with RWE nPower and E On – is now courting German civils giant Heitkamp to join them in their bid.
While Heitkamp is a seasoned player in the civils and nuclear sectors, it is also one of the contractors involved with the high profile reactor under construction in Olkiluoto, Finland – the cost of which, following a series of delays and defects, has climbed by more than 50 per cent over the past four years.
Heitkamp is building the main turbine house and the pump house of the new Olkiluoto plant, as well as some reactor auxiliary buildings.
But in Germany it has constructed more than 100 power plants and it has been suggested the JV is looking to bring Heitkamp on board to put itself in the best position to beat other major players, like Vinci and Laing O’Rourke.
One source said: “For local firms, coming together in consortiums means they can be seen to have a significant range of strengths.”
“And there will be a number of European firms wanting to get alongside British companies – they make very attractive partners to international players.”
Other industry sources have also indicated no British firm would want to be exposed to risk in a way contractors have in Finland and France – where a clone of the Finnish reactor, being built in Flamanville, is also behind schedule and over budget.
Lord O’Neill, the chairman of the Nuclear Industry Association and a key driver of the nuclear agenda in Whitehall, said the nuclear new build programme had recently reached a turning point with the purchase of land by E On and RWE and the announcement by EDF that it would soon tender jobs at Hinkley Point.
He said the programme was now finally gathering momentum following a period of anxiety within the industry over potential delays
Lord O’Neill admitted: “It has to be said that for a period there were concerns about the staffing levels at the Nuclear Installations Inspectorate.
“There were also anxieties over the companies whose designs were being examined – there was a feeling that they were not quite as focused as they might have been because they thought the understaffing issues would result in the programme slipping.”
But he claimed the staff shortages had now be resolved and all sectors involved were “now getting up to speed”.
He added: “The decks are being cleared for the new build to start.”
Tenders will be invited this summer for two major jobs on EDF’s £4 billion Hinkley Point Nuclear Power Station, including the £100 million enabling works and £500 million civils package.
But Lord O’Neill said it was not yet known when further works would come up for tender.
“I would have said that it would be 2011-12 when initial bidding would start,” he said.
“But the thing is, if the energy companies have the sites and they know what they want to do, the sooner they start the better – because the contracting process will be quite lengthy.”
The last nuclear power plant to be built in the UK, Sizewell B, took 12 years to build because of lengthy planning delays.
White & Case construction partner Ellis Baker said it was “relatively unusual” for four firms to band together, but added it might allow them to pool risk.
He said: “You can understand why they would try to negotiate an arrangement like this in this sort of situation. There is an enormous amount of civils work to be done on these projects and, of course, there hasn’t been one of these plants built in the UK for a very long time.
“Building up your consortium in this way allows you to divide the risk up between partners.”
But he also warned that the firms would need to have “a very clear division of responsibility” within the consortium to ensure no internal legal issues interfere with their work