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Bouygues/Laing O’Rourke picked for £2bn Hinkley civils contract

19 Jun 12 EDF Energy has selected Bouygues TP/Laing O’Rourke Joint Venture for the £2bn main civils work contract for its proposed Hinkley Point C nuclear power station in Somerset.

An estimated 4,000 jobs, including 3,000 in construction, will be created, if it goes ahead. It remains subject both to planning consent and to EDF Energy taking its final investment decision at the end of this year.

Scope of Bouygues/Laing O’Rourke’s contract would include 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. 

EDF hopes that early engagement of the contractor will improve cost effectiveness and construction deliverability by drawing on the JV companies’ experience of similar projects.  

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 said.

Laing O’Rourke chairman and chief executive Ray O’Rourke 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.”

EDF Energy chief executive Vincent de Rivaz said: “I am delighted to welcomeBouygues TP/Laing O’Rourke Joint Ventureinto 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 Ventureover 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.

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“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 inBouygues TP/Laing O’Rourke Joint Ventureto 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.”

 Energy secretary Ed Davey said: "I want to see new nuclear come forward as part of our future energy mix and for the UK to be a leading global destination for investment in new build. Today’s announcement by EDF Energy of a preferred bidder for their multi-billion pound construction contract for Hinkley Point is clear evidence of their commitment to nuclear in the UK, and shows the huge investment and job opportunities new nuclear can bring across the country.”

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