Friday, October 14, 2005

Fourth nuclear power project to be postponed for three years

TaiwanHeadlines - Home - Fourth nuclear power project to be postponed for three years

-- October 14, 2005 --
With its construction works seriously lagging behind schedule, the fourth nuclear power plant will not start its commercial operation until 2009, three years behind the original schedule, according to Ho Mei-yueh, minister of economic affairs.

This is the third postponement for the completion of the project; the previous schedule is for the project to start operation on July 15, 2006. As a result, total investment scale for the project may rise to NT$240 billion, making it possibly the most expensive nuclear power plant in the world.

Following the resumption of its construction works in February 2001, the schedule for the commercial operation of the plant's first generator was postponed from 2005 to 2006, and will be extended further to 2009 now. Taiwan Power Co., Ltd. has submitted the extension plan to the Executive Yuan for approval and has commissioned Taiwan Research Institute to study the increased cost for the postponement, as the basis for proposing a budget increase later on.

The nuclear and thermal power department of Taipower notes that the suspension, resumption, hike in the international prices of raw materials, and fluctuation in exchange rates have greatly boosted the construction costs for the fourth nuclear power plant. The uncertainty in the policy of the Executive Yuan concerning budget increase has greatly affected the willingness of contractors to undertake construction projects. Because of the low compensation to contractors for their loss from the suspension of the project and the volatility in the government's policy for the project, many contractors have chosen to revoke their contracts.

Taipower reports that the original investment budget for the project was NT$169.7 billion. Following the suspension and resumption of the project, Taipower proposed a budget increase of NT$50 billion last year. The Executive Yuan, though, approved only NT$19.1 billion of the amount, on grounds that budget increase exceeding the legal ceiling of 30 percent will need special approval from the Yuan.

The NT$19.1 billion increased budget will be used to increase the capacities of the project's two generators to 2.7 million kilowatts, from the original 1.8 million kilowatts. The increase boosted the total investment for the project to NT$188.8 billion, from the original NT$169.7 billion.

With the postponement of the project for another three years, the total investment is certain to climb further, possible to NT$240 billion, according to Taipower. One reason is that the NT dollar's exchange rate was set at US$1=NT$27.5 in the original plan, which has now been depreciated to US$1=NT$33. Another major reason is the increase in the international prices of steel bars and cement.


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