EDF Energy selects JV for Hinkley Point ‘C’ civils contract

EDF Energy is delighted to announce the selection of Bouygues TP/Laing O’Rourke Joint Venture as preferred bidder for a contract for civils work to build a proposed new nuclear power station at Hinkley Point C in Somerset.

The contract, worth around £2 billion, will create an estimated 4,000 jobs with many of the 3,000 or so construction workers under this contract living in Somerset. The work, which is subject to planning consent and EDF Energy taking its final investment decision at the end of this year, includes the construction of the main civils works for the nuclear island, the conventional island and supporting structures.

Ahead of the signing of the contract, the joint venture has entered into a preliminary agreement for Early Contractor Involvement which will see the two companies working on the development of the detailed design, construction methodology and programme up to EDF Energy’s final investment decision. 

This early engagement will achieve improved project cost effectiveness and construction deliverability by drawing on the JV companies’ experience of similar projects.  It will also ensure early identification of any issues, that the best processes and people are in place as early as possible, and early engagement can begin with the local community and supply chain.

As part of an embedded project partnership with EDF Energy, this progressive agreement will further enhance the project’s contribution and ensure that Hinkley Point C is fully prepared for efficient and expert construction.

This contract is the first relating to the main construction works which will see up to 25,000 jobs created on site over the course of the project, including an estimated 400 apprenticeships for the civils work.

EDF Energy expects further apprenticeships and skills development opportunities in other parts of the project and is already working closely with local colleges, future employers and our Trades Union partners to ensure long term up-skilling of local and wider supply chains as a result of the project.   The civils contractor will fully support and be engaged in these education and training initiatives. 

The announcement today is a critical step in EDF Energy’s plans, with Centrica, to build the first new nuclear reactors in the UK for around 20 years, which will provide enough low carbon electricity to power five million homes.

EDF Energy Chief Executive Vincent de Rivaz said:

“I am delighted to welcome Bouygues TP/Laing O’Rourke Joint Venture into our project. The agreements announced today show we are continuing to maintain momentum in 2012 towards our final investment decision. We will work with Bouygues TP/Laing O’Rourke Joint Venture over the next few months to ensure we are in the best possible position to begin work on site once the investment framework and permissions are in place.

“This was a close, very competitive tender which attracted some high quality and robustly-costed bids.  We look forward to harnessing the relevant and complementary experience, expertise and knowledge offered by this powerful partnership of two well-respected and highly-committed construction companies.

“So much has been achieved on site already and we now have a strong partner in Bouygues TP/Laing O’Rourke Joint Venture to help to plan the next phase of works. For us, early engagement with key contractors is critical to ensure that they are clear on their responsibilities and the expectations we have of them.

“The civils contract will assist the UK’s economic recovery and boost economic prospects and prosperity locally. Our project will inject billions of pounds into the economy, revitalise entire sectors of industry and support tens of thousands of further jobs.

“2012 is a defining year for new nuclear. We will continue our discussions with Government about agreeing a legally robust investment framework. Agreeing the contract for difference is key – as I said at the recent Energy and Environment Select Committee hearing – it means that we and Government will have to be clear about our costs before we sign a contract for our project.

“It’s part of the open and transparent process taking us towards our final investment decision. The final investment decision will be based on cost evidence which will be robust.

“We are also working towards obtaining crucial decisions on planning consent and design approval later this year. A huge amount remains to be done but we are determined to do it.”

Commenting on today’s announcement, Ray O’Rourke, Laing O’Rourke Chairman and Chief Executive said:

“We are delighted, along with our partner Bouygues Construction, to be appointed by EDF Energy as preferred bidder to lead the development of the first new nuclear power station, which is vital to meet the UK’s future energy demands and support the wider economic recovery.

“Today’s announcement marks an important juncture in Laing O’Rourke’s growth and development as a delivery partner of choice to the power sector. We look forward to bringing this nationally strategic project into successful reality. Through our direct delivery capability and investment in a new generation of engineering jobs and skills, we have the opportunity to create a valuable legacy that is so critical to the future success of the UK nuclear industry.”

Philippe Bonnave, Deputy CEO of Bouygues Construction, said:

“We are very proud to be preferred bidder in partnership with Laing O’Rourke. This project confirms the mutual confidence that exists between EDF, Laing O’Rourke and Bouygues Construction.”

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