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Hinkley construction “milestone” reached before contract signed

Hinkley Point deal under fire as construction ‘milestone’ hit before contract signed, Telegraph,   Emily Gosden, energy editor 30 OCTOBER 2016 

The Government is facing fresh criticism over the Hinkley Point nuclear deal after it emerged a condition supposed to ensure the £18bn plant was being built on schedule had already been met before contract was signed.

A clause in the subsidy deal gives ministers the right to cancel the contract if EDF, which has been plagued by delays building reactors elsewhere, has not hit a construction “milestone” within 33 months of taking its final investment decision.

The milestone requires the “commissioning of the main concrete batching plant” at the Somerset site.But the Telegraph can disclose that EDF believes it has already “achieved that milestone”, after two concrete batching plants were commissioned earlier this year, months before the deal was inked in September.

While the meeting of the condition still has to be officially signed off by the Government agency handling the contract, EDF expects this to be “completed shortly”.

This renders the milestone clause largely pointless and leaves no other lever to ensure construction is proceeding as planned in coming years.

Ministers argue EDF has an incentive to build Hinkley by its 2025 target date because it will not receive any income until it starts generating.

However, the contract, which has been widely criticised as too generous, allows EDF to retain the same subsidy deal if Hinkley is up to four years late and only lets the Government cancel if it is still not running by 2033.

Alan Whitehead MP, Labour’s shadow energy minister, said ministers must confirm whether they knew the concrete plants has already been built when the subsidy contract was signed.

If they did, it would be “a pretty alarming reflection on the way this particular contract may have been drawn up” and raised “serious questions”, he said.

Milestones were intended as a “protection of public money” to enable ministers to act “where funding is going into something which it is evident is not going to happen”, he said.“You could be forgiven for the suspicion that this was a potentially deliberate clause which could have been designed to make it impossible for the milestone agreement to be breached,” he said………http://www.telegraph.co.uk/business/2016/10/30/hinkley-point-deal-under-fire-as-construction-milestone-hit-befo/

November 4, 2016 - Posted by Christina Macpherson | politics, UK