A heavily edited assessment of the project to overhaul the Darlington nuclear station has identified up to $300 million in cost increases, two years before physical work is scheduled to start.
The massive project is also struggling to stay on schedule, according to the assessment.
But Ontario Power Generation, which owns the station, says the project is going well. It pegs the latest cost increase at $235 million.
The climbing costs are noted in a report by Burns & McDonnell Canada and Modus Strategic Solutions Canada, consultants hired to provide broad oversight for the project.
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Their report says the cost escalation is largely due to the poor quality of estimates made at earlier stages of the project:
“The increased budgets are simply reflective of the true project costs, had they been estimated properly at the outset.”
The report also says staffers are scrambling to complete detailed engineering by next May, so they can produce a “high quality project cost.”
“Engineering is currently challenged to meet this milestone,” it says, adding that the problems “continue to present schedule threats.”
OPG spokesman Neal Kelly downplayed the risks.
“We’re confident the overall refurbishment project will come in on time and on budget,” he said.
Planners have broken the overhaul into 19 sub-projects, only two of which are behind scheduled and over budget, he said. A third is on schedule, but over budget.
Kelly said the project is expected to cost at most $10 billion, in 2013 dollars. That figure will grow with inflation, since it won’t be finished until 2026
OPG has said in previous filings that the final cost of the project, “translates into a completion cost (of) $12.9 billion, including capitalized interest and contingency, by the end of the project.”
The biggest part of the project, making up nearly 60 per cent of the cost, involves rebuilding the cores of the four reactors at Darlington.
But the recent cost escalation comes largely in supporting areas of the station, known collectively as the “campus plan projects.”
Collectively, those costs have jumped to $824 million from $552 million, according to the report.
The document, filed with the Ontario Energy Board, is riddled with blacked-out sections.
Some of the blackouts are head-scratchers, since the deleted information is available elsewhere in the report.
For example, one sentence reads: “In all, OPG believes that the cost variances from the campus plan projects will be approximately (blacked out) which equates to approximately 2.5 to 3 per cent of the refurbishment project’s total $10 billion working budget.”
Three per cent of $10 billion is $300 million.
Nuclear overhauls have had a troubled history.
A decade ago, OPG figured it would cost $1.3 billion to return four mothballed reactors at the Pickering station to service. In the end, the price tag was $2.6 billion for two reactors.
More recently, Bruce Power spent $4.8 billion to return two laid-up reactors to service, after an initial estimate of $2.75 billion.
Shawn-Patrick Stensil of Greenpeace said the Darlington cost increases aren’t surprising.
“Here we go again,” he said. “Every nuclear project in Canada has gone over budget and the Darlington refurbishment is no exception.”
After each project, planners say they’ve learned their lessons, he said.
“They fail to admit that the sheer complexity of nuclear projects as an unavoidable contributor to project risk.”
The oversight firm says that OPG has learned that it will need to keep a tighter rein on contractors for the massive project.
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