What does the Project Developers say about business perspectives of the construction of the new Visaginas NPP

What is the relation between the closing of Ignalina NPP and construction of the new Visaginas nuclear power plant?

Head of the Competence Centre for General Infrastructure of Visagino atominė elektrinė, UAB  Rimvydas Štilinis: In terms of time and type of work, the projects are closely interrelated. The closure of the Ignalina NPP operation is already in process, and is planned to continue until 2030. Construction of the new Visaginas NPP will tentatively start in 2010–2012 and probably last until 2015–2018. The involvement of human resources and local enterprises in both projects will, in a sense, overlap and evidently involve greater resources.

What are the general economic benefits for the country in constructing a NPP?

Director General of Visagino atominė elektrinė, UAB Rimantas Vaitkus: That depends on the available industrial potential of the country. Countries which are able to participate in the production of nuclear technology win more than just the development of a nuclear industry and the electrical energy it produces. One of the first steps the reactor producers take when formulating an offer for the procurement procedure of a power plant is to determine which part of the plant construction project they will be able to complete with the efforts of a local  constructors or designers, as this results in a considerable reduction of the overall project costs. The number of Lithuanian enterprises which are currently ready to take part in the construction of the nuclear power plant is rather limited, and includes mostly contractors already working for the Ignalina NPP. In a nutshell, Lithuanian companies will have a competitive advantage over companies in neighbouring countries; however, to make use of it, they should be investing now in serious preparation.

R. Štilinis: The Finnish example is also a clear evidence of the scope of work and operational possibilities. 180 Finnish companies, working on the site, are performing different tasks: site preparation, transportation, security of the object, auxiliary functions, etc. A German and French consortium is acting as the General Contractor. As the contractors claim, they lack potential; thus, if possible, they would gladly invite other local companies for assistance. For example, at present over 50 percent of construction work in Finland is performed by Polish workers and specialists. The metal basis for the reactor was welded at Gdansk shipyard. Equipment suppliers will make efforts to have the necessary non-specific components manufactured closer to the NPP site.

Who usually constructs a power plant and what are the main stages of work?

R.Vaitkus: The preparation stage, the first and most time-consuming one, covers research, studies and assessments; therefore, it mostly requires advisory and research services. The overall environmental impact assessment is carried out with respect to the location in which the power plant is to be constructed. For instance, in Lithuania, the Environmental Impact Assessment (EIA) mostly involves research institutions. Foreign companies specialising in engineering research are among the other contractors operating in the fields where Lithuanian companies lack experience. After the preparation stage, we will start the preparation of technical specifications for procurement of technology. The scientific and engineering recourses are required on Lithuania’s part for specifically that purpose. Assessment of offers for technical and economic terms follows. At this stage, advisory services also prevail. The contract’s signing signals another stage – designing and licensing. Additionally, we already face a serious problem. There is a lack of designing skills amongst Lithuanian industrial entities, but we still have time. We are trying to encourage the participation of organisations which could get engaged in such work. They have to get ready and build up their capacity in order to participate in the designing of this object. We guarantee an immense load of work and assure that input into the qualifications and quality will surely pay off.

R. Štilinis: Construction work starts after designing. The Finnish example shows that at least site preparation may be performed by local companies.

Head of the Competence Centre of Technologies of Visagino atominė elektrinė, UAB V. Ledzinskas: The following 3 main stages may be identified:

• Preparation works before conclusion of the contract for EPC (engineering-procurement-construction) with the general contractor. Organisational issues, political decisions and the ability to accomplish homework in an efficient way are intertwined at this point;
• Designing, licensing and other similar engineering work. I assume it will take approx. 2 years;
• Construction, testing and commissioning. Suppliers of NPP technologies declare that this stage lasts from 3 to 5 years.

In which of these stages Lithuanian companies are able to participate in?

R.Vaitkus: I assume that, above all, they could execute various construction tasks. Compliance of the companies with the civil engineering requirements is not enough in order to get engaged in them. Requirements, determined by the status of the nuclear project and the safety requirements applicable to the companies which will be carrying out the orders, are much higher – quality management needs to be implemented, and the companies are subject to assessment in accordance with the requirements of the general contractor and the State Nuclear Power Safety Inspectorate. The ability of the companies to accomplish the planned work will be thoroughly examined. The mounting of technological units starts with the construction stage, thus demanding different specialisations from companies. By the way, such companies operate in Visaginas. However, in the meantime, they are performing minor tasks.

What mistakes or lessons experienced by other countries should be considered, or are worth remembering?

V. Ledzinskas: “Small” countries, where similar projects were promoted, such as Finland, Romania and South Korea, should be taken as examples. Practice shows quite marginal involvement of local enterprises in the construction of the first power unit (around 10 per cent of the scope of work). However, there was a dramatic increase in their contribution during the construction of the second and third units (up to 50–80 per cent). Compared to those countries, Lithuania certainly has much smaller possibilities, yet they are remarkably greater in tandem with Latvia, Estonia and Poland.

R.Vaitkus: The construction stage leads to preparation for operating, for which the operating organisation is gearing up. The operation of the new Visaginas  power plant will nevertheless differ from that of the old one. According to the previous strategy, the power plant used to increase its capacity and skilled staff not only for operation, but also for repairs. Interruptions in operations are short, but people and capacity were kept on all year long, which implies the inefficient use of specialists.

The western model is different. Power plants are operated by a considerably small number of staff ranging from 300 to 500 people, while 1,000-1,500 specialists from various fields required at the time of repairs are brought in through contracts with different specialised companies in order to take care of the repair of individual units and systems during interruption of the NPP. At this point, business is offered a wide range of opportunities. Many different companies will be needed for the performance of specific tasks – repairs of turbines, generators, checking of power units, security systems, measuring systems, etc. The power plant and its staff will be engaged only in operational management and will arrange work during interruptions for repair. Therefore, specialised companies will find wide possibilities for future business. Repair units, highly skilled in a specific field, are moving around Europe from one NPP to another, concluding contracts with different power plants and carrying out their work. There are many common procedures in the nuclear industry which must be carried out by competent individuals. Such a system proved to be very efficient in Germany, where various companies operate a number of power plants. Coordination of work gives them flexibility and efficiency in their operation.

What should Lithuanian businesses, seeking participation in the construction of the new Visaginas  NPP, know?

V. Ledzinskas: There will be an immense variety of work, requiring different profile companies. If the general contractor for the NPP construction succeeds in finding local enterprises which are both eligible and capable of ensuring quality and compliance with the other requirements, much of work will be assigned to such local companies. Therefore, it is now of utmost importance to know the requirements applicable to subcontractors and take action to achieve their compliance. It is also worth considering the possibilities of equipping production facilities closer to the planned site. We still have time and space for that.

I would also like to note that we should focus not only on construction and subcontracting – there are a number of tasks that need to be accomplished during the preliminary stage, and responsibility for their completion lies mainly with the would-be project developer, including various tasks ranging from environmental survey to earthwork and construction. Suppliers of the aforementioned services should show initiative and get involved at the earliest stage. Those that are first and prove to be efficient will gain an advantage over the newcomers. Requirements for tasks to be contracted by the project developer are set forth in the procurement documents and are to be taken into consideration when submitting offers. Contractors will be selected by the general contractor at its discretion on the basis of his criteria.

How will specialists being employed at the new Visaginas  nuclear power plant be trained? Is there a need for training staff?

R.Vaitkus: Nuclear physics is not the only speciality that will be required at the nuclear power plant. There will be a need for economists, financiers, lawyers, engineer officers, electricians and representatives from many other specialities.

V. Ledzinskas: The would-be project developer will need highly skilled specialists proficient in English and experienced in the implementation of similar projects. Specialists who are able to draw up technical specifications for the procurement procedure and carry out offer assessment – engineers, officers, physicists, electricians, operators, etc. – will be required. Designers, construction supervisors, project managers, lawyers, financiers are already needed. It is easier to name those who will not be needed.

R. Štilinis: The preparation of the National Programme for Nuclear Industry Specialists is currently in progress. We are speaking about highly skilled specialists who will manage the project and operate the new Visaginas nuclear power plant. Let us bear in mind that we will also need highly-skilled workers. Approximately 3,000 workers will be required in the period of construction and some 1,500-2,000 people will be needed during repairs and fuel reloading. Therefore, they also have to be trained. Regrettably, our education system has not yet taken this fact into consideration. New companies, as referred to above, will need both ­– university educated specialists and skilled workers. In other words, high skills are in demand in any field of the nuclear industry. For instance, there is currently a serious lack of skilled welders. Colleges and vocational schools should be prepared for this as well.

Wouldn’t it be worth emphasising which perspectives are offered for the companies eligible to be NPP constructors or repair specialists?

R.Vaitkus: Construction of one unit, from concrete casting to the end of the power plant construction, takes at least five years. Two or three more units, depending on their capacity, will be constructed at a later stage. Another issue which has to be considered is repair units, which will start operating on a periodic basis. If four units are erected, they will be stopped a few times a year for a two or three week period. As a result, nuclear technology maintenance companies will have a significant amount of work. It can be said that there is a sixty year guarantee for work, and it is thus indeed worth getting prepared and accumulating knowledge.