[ RadSafe ] Bechtel wins TVA contract

[Susan Gawarecki]

Bechtel wins TVA contract - Pact worth $1B to finish 5-year Unit 2 
reactor at Watts Bar Nuclear Plant
Knoxville News Sentinel
Tuesday, October 16, 2007
By Andrew Eder

TVA has awarded Bechtel Power Corp. a contract worth up to $1 billion to 
lead engineering, procurement and construction work at TVA’s unfinished 
Unit 2 reactor at Watts Bar Nuclear Plant. Bechtel, the country’s 
largest nuclear contractor, beat out a contract proposal led by The Shaw 
Group Inc.’s Stone & Webster unit. Masoud Bajestani, TVA’s Watts Bar 2 
vice president, said Bechtel’s proposal also included contractors 
Washington Group International Inc. and Sargent & Lundy LLC.

The contractors will be responsible for marshaling a peak work force of 
2,300 engineers and craftsmen for the nuclear project, which is expected 
to last five years and cost $2.49 billion. Bajestani said TVA plans to 
hire an additional 300 contractors for tasks like pre-operational 
testing at Watts Bar, located in Spring City, Tenn., about 65 miles 
southwest of Knoxville. TVA’s largely vacant East Tower will be the 
engineering nerve center for the project, with hundreds of contract 
workers moving into the downtown building by year’s end. Bajestani said 
staffing at the tower would peak in two years at 320 to 330 workers, 
then scale down by the end of the third year.

Bechtel spokesman Francis Canavan said the company expected to contract 
out a “significant portion” of the Watts Bar work but had not finalized 
the arrangements. He did say there were “no plans for Shaw as part of 
our project.” On Monday, Bechtel’s Web site listed 38 job openings in 
Knoxville, mainly for engineers, and 38 positions in Spring City in the 
fields of construction, engineering, quality assurance and project 
controls. Washington Group’s Web site listed 45 openings for engineers 
in Knoxville.

Canavan said Bechtel was confident it would find enough qualified 
engineers for the project and expected to hire a number of former TVA 
employees. Bajestani said TVA expects to face a shortage of electricians 
and welders, for which it will turn to specialty contractors. Bajestani 
said TVA was working to finalize two additional contracts with Siemens, 
which will be replacing major components of the turbine system, and 
Westinghouse, the manufacturer of Watts Bar’s two pressurized-water 
reactors.

Bechtel was the lead contractor on a $20 million cost and scheduling 
study that found the plant could be finished in five years at a cost of 
$2.49 billion. TVA’s board relied on the study’s results in approving 
the completion of Watts Bar Unit 2 at its Aug. 1 meeting.

Stephen Smith, executive director of Knoxville-based Southern Alliance 
for Clean Energy, called the selection of Bechtel “a decision where a 
handful of staff at TVA tapped their favorite contractor.” Smith said 
TVA’s board and Congress — the federal utility’s two chief regulators — 
have acted as cheerleaders for nuclear power, allowing TVA to make 
multibillion-dollar decisions without the same level of public input 
that other utilities are required to have. “TVA just committed to 
spending $2.5 billion of our money,” Smith said, “and if it was a good 
decision, it would withstand public scrutiny.” Bajestani said TVA was 
heavily involved in the cost and scheduling study and released the 
results to all interested contractors, although the utility has publicly 
released only a redacted, 12-page version.

In May, TVA finished a five-year, $1.81 billion restoration of Unit 1 at 
Browns Ferry Nuclear Plant in Alabama, where Bechtel performed 
engineering services and Stone & Webster did construction modifications. 
Audits by TVA’s independent Office of the Inspector General found 
multiple instances of overpayments to contractors at Browns Ferry. An 
inspector general’s report from Aug. 22 states that “several 
investigations are still ongoing related to contract fraud” at Browns 
Ferry, but Stefanie Hoglund, a spokeswoman for the inspector general’s 
office, said none of the investigations are related to Bechtel.

Bajestani, who led construction efforts for TVA at Browns Ferry Unit 1, 
said the Watts Bar contracts would remove some “ambiguities” that 
existed in the language of the Browns Ferry contracts. Hoglund said the 
inspector general’s office already has offices established at Watts Bar 
and was planning an increased presence during construction.

In 1996, Unit 1 at Watts Bar became the last new nuclear plant to come 
online in the United States after 23 years of construction and $6.9 
billion in costs. Unit 2 was largely completed before construction was 
halted in 1985, but the plant was never finished. TVA wrote off $1.7 
billion in Watts Bar Unit 2 construction costs in 2001.