Case Study – Nine Billion Dollar Project ABANDONED!

If there ever was a case study worth reviewing, it would be the case of the Virgil C Summer Nuclear Generating Station in the state of South Carolina.

This is not a case anyone would want to emulate.  This is a case to be regarded as the perfect storm of what NOT to do in construction.

This story begins in March of 2008 when South Carolina Electric & Gas Company (SCE&G) and South Carolina Public Service Authority (Santee Cooper) filed for a license to build two new 1100MegaWatt reactors.

The Engineering Procurement and Construction (EPC) firm awarded was Westinghouse Electric Company.

The project was initially estimated at 9.8 Billion and was scheduled to take 5 years to build.

In March of 2012 (4 years after the request had been made) the Nuclear Regulatory Commission (NRC) approved the license.

Westinghouse who had a history in developing nuclear reactors was known as a leader in nuclear power.  Westinghouse stepped in as a builder of nuclear plants in order to better control the costs of construction, but in the wake of waning interest in nuclear power and renewed fears following the Fukushima disaster in Japan, Westinghouse was losing interest in this line of business.

For the Virgil C Summer Nuclear Generating Station it’s prospects of completing the project seemed increasingly less likely.  In October 2014 Westinghouse reported a delay of at least one year and extra costs of $1.2 billion.

A second revision to schedule and cost came in March of 2015 shifting the completion date from 2018 to 2020 and raising costs from 9.8 billion to 11 Billion.

By February 2016 SCE&G and Santee Cooper brought in Bechtel Corporation to review the project and report back it’s findings.

In the wake of the report, Westinghouse withdrew itself as a nuclear plant builder opting to focus on maintaining existing reactors, a line of business Parent Company Toshiba believed was more stable and reliably profitable and in March of 2017, Westinghouse filed for bankruptcy protection.

The Bechtel report would not be released until September of 2017 after SCE&G and Santee Cooper announced the project would be scrapped.

The Bechtel report revealed an endless list of problems which included; mismanagement, poor designs, high turn-over, poor scheduling, inadequate budgeting, and low morale.

For Westinghouse, the saga of  Virgil C Summer Nuclear Generating Station is over.  In January of 2018 Brookfield announced that it acquired Westinghouse of 4.6 Billion.

For the residents of South Carolina and utility’s SCE&G and Santee Cooper, the legacy of this abandoned project looms large as lawmakers consider whether rate hikes from the two utilities to pay for the project were a form of criminal fraud.

It’s impossible to imagine that a project could be plagued by as many troubles as this, but as the old saying goes truth is stranger than fiction.

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