31.5.2016

Hanhikivi 1 NPP: Opportunities for sub-suppliers

Finland’s sixth nuclear reactor, Hanhikivi 1, will be built in Pyhäjoki in Northern Finland by Fennovoima. RAOS Project Oy has been has been chosen as general contractor for the Engineering, Procurement and Construction (EPC) of the Nuclear Power Plant. RAOS Project Oy is a subsidiary of Russian state corporation Rosatom State Atomic Energy Corporation (Rosatom). Preparatory landscaping and infrastructure works are already under way and construction of the facility is scheduled to commence in 2018.

The owner Fennovoima itself is responsible for the infrastructure, support and auxiliary buildings. The main suppliers selected so far by Rosatom are Atomproekt and OKB Gidropress for the general design, Atomenergomash for the Long lead main components for the reactor and turbine islands, and “CJSC Concern Titan-2” for detailed design, construction, installation, supply of materials (excluding long-lead equipment), BOP and I&C equipment.

Titan-2 and Fennovoima are currently looking for subcontractors and suppliers. It remains to be seen to what extent Atomenergomash will use sub-suppliers for their delivery scope. Fennovoima invites interested bidders to register at www.fennovoima.fi/en/hanhikivi-1-project/subcontracting/register. As far as Titan-2 is concerned, a list of current tenders is published and updated at http://titan2.ru/en/khankhikivi-1/rezultaty-konkursov. The information on the results of procurement procedures are found under http://titan2.ru/en/khankhikivi-1/rezultaty-konkursov-2. This information might be of interest for next level sub-suppliers, which offer suitable services for any major sub supplier, e.g. Rolls Royce as supplier of the I & C system.

Due to the ownership structure of Titan-2 and Atomenergomash, the tendering process is not subject to the strict requirements of (Finnish or EU) public procurement law. However, this does not mean that bidding for any specific lots would be less formal or time consuming for the bidder. The absence of formal legal requirements allows for flexibility, but it is difficult to predict whether or not the main contractor will be inclined to compromise. In general, the main contractor will stick to the pre-defined procedures: Uniform procedures play a key role in keeping procurement manageable.

In order to participate in the open prequalification, the applicant has to fill in the published forms mentioned above and send them to the procurement entity e-mail: hanhikivi1@titan2.ru. In case of acceptance, the applicant is included into the Register of Accredited Subsuppliers.

Depending on the procurement schedule for the respective lots, the sub-suppliers are invited to place their offers.

However, the best offer does not guarantee the order. In general, a competitive bidding between shortlisted candidates will follow. After a negotiation round the candidates are asked to place a new bid.

Once employed, one thing is certain: The original order will be changed during the project, in regard of both the agreed work scope and technical specifications. Basic knowledge about Finnish usage on additional compensation claims is therefore valuable (see article Change Management).