Thursday, October 11, 2007 at 10:26AM
There is an interesting article by Laura Smith-Park of BBC News, Washington, regarding the possible boom in the construction of nuclear reactors today.
The flood of applications now being generated for the construction of new nuclear power plants is gaining momentum and generating interest in this sector. This article lists a few of the factors behind the renewed enthusiasm as follows:
“The introduction of a new fast-track combined construction and operation permit, making new reactors easier and cheaper to build
A tax credit, introduced in the 2005 Energy Policy Act, of 1.8 cents per kilowatt hour for the first 6,000 megawatts generated by nuclear plants
Risk insurance adding up to $2bn for the first six plants to be built, protecting companies against the cost of delays in construction
Multi-billion-dollar loan guarantees
A likelihood that the cost of emitting CO2 will rise as the battle against climate change intensifies”
The risk insurance for delays in construction is one that caught our eye. We have mentioned in previous articles that delays in construction put millions of dollars at risk and could break a construction company not acquainted with claims resolution techniques, hence the proliferation of consultancies professing to have such skills. In a competitive bidding environment it is difficult for the contractor to make a provision for such delays, as their price will be rejected as too expensive. The more knowledge that you have about a project the more expensive your bid becomes and so on some occasions the ‘uninformed’ are awarded the contract. We think that such ideas serve as good incentives and will hopefully advance the process of getting this nuclear programme up and running.
To read the article in its entirety please follow this LINK.
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