CANDIAN TECHNOLOGY TRANSFER CERNAVODA CANDU PROJECT

1. CANDIAN TECHNOLOGY TRANSFERCERNAVODA CANDU PROJECT The International Nuclear Energy Congress, Istanbul, Turkey, April 11-12, 2007 Dr. Sardar Alikhan, Alikhan Consulting Inc. (Ex-AECL-Qinshan/Cernavoda Projects)

2. Cernavoda CANDU Project

3. Cernavoda CANDU Project

4. Contents • Cernavoda Unit 1 • Scope of Work/Major Challenges • Project Management Team/Staffing • Engineering Management • Construction Management • Status Verification/Remedial Work • Planning and Control • Commissioning and Operations • Operations Staffing/Training • Turnover to Operations

5. CONTENTS • Cernavoda Unit 2 • Scope of Work • Reference Design • Project Management Team • Current Progress • Localization of Technology • Nuclear Infrastructure • Fuel Fabrication • Heavy Water Production • Key Factors to Success • Concluding Remarks

6. Cernavoda 1: Unit completed in Dec. 1996 87% lifetime capacity factor Cernavoda 2: Commissioning and testing is currently underway, ready for first criticality and scheduled for commercial operation later in 2007 Cernavoda 1 & 2 - Romania

7. CERNAVODA UNIT 1

8. CERNAVODA UNIT 1 CONTRACT • In 1992, Romania signed a new contract with AECL-ANSALDO Consortium (AAC) authorizing AAC to manage the remaining work to complete Unit 1 and to preserve Unit 2-5 • The new contract took full recognition of previous technology transfer agreements signed with AECL for NSP, with ANSALDO for BOP and with GE for T-G • At this time, Unit 1 and Units 2-5 were at various stages of completion. Most of the major equipment were already installed for Unit 1 and 2 but its status needed to be thoroughly verified to meet current quality and licensing requirements.

9. AAC SCOPE OF WORK • Manage completion of construction, installation, commissioning and early operation of Unit 1 and preservation of Unit 2-5. • Provide QA assistance to local nuclear component manufacturers • Provide technical assistance and training to construction contractors, especially in welding and NDE • Engineering management and services covering all activities required for Unit 1 completion, including coordination between NSP, BOP and Support Services • Procurement of goods and services locally and outside, maximizing Romanian content • Perform selection, training of Romanian operations staff • Perform commissioning and operations services, extending up to 18 months after in-service

10. Project Management Team (PMT) • Customer delegated its full authority to AAC PMT to manage the project on its behalf and placed all resources required at its disposal. • PMT authorized to stop all or part of the work, reject any supplies or services, if it does not meet the safety and quality requirement. • Prior customer authorization required to commit funding in excess of the approved budget in foreign exchange and local currency

11. PMT STAFFING • Project Management • In Unit 1, led by AECL-ANSALDO and with participation of the Owner’s staff • Owner’s staff integrated in the Project Management Team and Commissioning Team to the fullest extent possible • Peak Expatriate staff of 400 (240 AECL, 160 Ansaldo) • Over 2000 Romanian staff integrated in PMT and Commissioning Team • Expatriate staff provided hands-on field supervision. • Production and quality went hand in hand. If work is not done right, it was rejected and redone correctly.

12. Engineering Management and Quality Surveillance • Overall direction, coordination and administration of all engineering services: • Interpretation of technical documents • Technical direction and resolution of all construction, commissioning, and safety/licensing issues • Approval of subcontract work packages • Check compliance of as-constructed plant with design, rejecting any non-conforming items • Manage NDE inspection program • Manage project change control process • Certification of interim and final acceptances • Approval of as-built drawings

13. Construction Management • Overall direction, coordination and administration of construction on Unit 1 and remedial work on Unit 2: • Implementation of construction methods, schedules, work packages and manpower schedules • Technical assistance to local construction subcontractors • Support implementation of inspection programs • Management of construction subcontracts • Establish a common labour policy with subcontractors • Establish progress reporting system for subcontractors

14. Baseline Design and Construction Status Verification • AAC Engineering and Quality Surveillance team performed an in-depth verification of the status of NSP, BOP and Support Systems • Check all design documentation for completeness • Check all SSCs for correct installation per design • Perform all NDE for systems that require to be qualified • Check locally supplied equipment and materials for compliance with equipment specification • Prepare comprehensive status reports to perform remediation

15. Remedial Work • Examples of remedial work included: • All piping welds inspected and repaired as required • Piping system cleaned • Cracked concrete on containment dome replaced • Locally made diesel generators replaced with imported units • Refurbishment of support systems e.g. heating boilers, WTP, Firewater, common pump house equipment etc.

16. Planning and Control • Planning process started before the Contract effective date and continued for the lifecycle of the Project. • Establish project work breakdown structure and logic • Develop level 2 coordination and control (C&C) schedule • Establish realistic targets for each milestone • Define project priorities • Report actual progress • Identify Critical issues • Ensure all parties work to a common goal • Use as-built schedule to input to future projects taking into account lessons learned and other developments.

17. Integration of Inputs to C&C Schedule

18. COMMISSIONING AND OPERATION • AAC Commissioning/Operations staff: • Led and supervised commissioning and initial operation including in-service inspection and maintenance. • Accepted systems turnover from construction • Supervised commissioning for compliance with approved procedures • Evaluated commissioning completion to declare availability for service • Supervised operations support programs: shift operation, maintenance, chemistry control, materials control, radiation protection, industrial safety, safety and licensing, planning and scheduling • Assist in staff training • Customer provided full complement of operation staff • AAC staff transferred leadership and supervision to customer’s staff gradually as a function of their demonstrated capability

19. OPERATIONS STAFFING PLAN • AAC developed staffing plan along with specific position specific requirements • Covered full complement of operations staff trained and available for commissioning and operation at least 18 months prior to Unit 1 connection to grid • Supported the customer to select personnel • Developed and conducted training program for key operations staff

20. OPERATIONS TRAINING • 90 key Romanian staff identified for training in Canada. • Management and senior supervisory 10 • Shift operations 50 • Maintenance 10 • Computers 4 • Technical support 12 • Other 4 • Training durations ranged from 4 to 24 months depending on job requirement • Classroom training in CANDU technology, skills training, in-plant training in Canada, and simulator training. • On-the-job coach and mentoring during commissioning and early operation

21. Unit 1 Turnover to Operations • Assessment of all structures, systems and components for compliance with design requirement • Assessment of each operations department along with recommendations to fill any gaps • Following formal turnover of Unit 1, WANO conducted a Peer Review in July-August 1997. One of the key strengths noted was: • “ A very knowledgeable and professional management team is established. The management team willingly embraces new ideas, and is highly motivated to achieving excellence in the operation of the plant.” • Unit 1 operated by Romanian operating staff since in service date has an excellent safety and performance record • Lifetime capacity factor for Unit 1 over the past 10 years is around 87%

22. June 30, 1997 at 17:00 Sardar Alikhan handing over Unit 1 to Ionel Bucur

23. Unit 1 completed and operating at 87% CF since in-service

24. Cernavoda Unit 2

25. Unit 2 Contract Scope The Contract between SNN, AECL and ANSALDO became effective on March 24, 2003 With CED, relevant financial agreements finalized, allowing rapid build up of expatriate staff AECL and ANSALDO provided firm price home office support to: perform conceptual engineering procurement of sole source pre-assigned supply procurement of other items as a result of SNN international tender process. Balance in Romanian scope including detailed engineering, equipment and /material supply and construction

26. Unit 2 Reference Design • Unit 2 reference design took into account current licensing requirements and factored in: • Unit 1 as-built design as of 30 June 1997 • Assessment of Unit 1 commissioning reports • Assessment of design changes implemented on Wolsong 3 and 4 and Qinshan • 129 major design changes and 154 design improvements

27. Site Engineering Owner SNN Project Management AECL (Lead)/Ansaldo/SNN Construction Commissioning T/G - GE Conceptual Engineering AECL Equipment - Alstom Equipment- AECL Equipment - NEXANS Conceptual Engineering Ansaldo Equipment - Romanian Equipment- Ansaldo Fuel– FCN Heavy Water– RAAN Detailed engineering– Romanian Construction– Romanian Cernavoda 2 Project Management Structure

28. Unit 2 Project Management • Engineering, Procurement and Construction • Led jointly by SNN and AECL-ANSALDO • Required full integration and team effort of all parties including AECL-Canada, ANSALDO-Italy and SNN-owner • Project management though a site-based Management Team (MT) • SNN providing deputies at all levels providing full integrated team approach • Peak staffing: 180 expatriates, and 1450 Romanians. Site construction contractors staff peaked around 3000 • Expatriate staff split 60/40 AECL/ANSALDO • More than 80% of project management staff were Romanian

29. Current Progress • Commissioning of all systems required for fuel load completed • Fuel loading completed • Unit ready to achieve first criticality • Commercial operation expected in fall 2007.

30. LOCALIZATION OF TECHNOLOGY

31. Nuclear Infrastructure • Nuclear Fuel Fabrication Plant in Pitesti. Heavy Water Production Plant in Drobeta-Turnu Severin • Heavy Nuclear Equipment Factory in Bucharest • Nuclear Research Institute in Pitesti for R&D • CITON engineering and technology centre for nuclear project in Magurele, near Bucharest • Romanian construction contractors in civil, mechanical, electrical and C&I • Other specific nuclear materials and devices manufacturing plants

32. Fuel Fabrication • Romania has localized nuclear fuel fabrication from the mine to the fuel bundle since the start of Unit 1 operation • Local fuel has excellent quality and reliability • Canadian Zircatec provided technical assistance • The facilities are expanded to supply fuel to unit 1 and 2 starting in 2007 • Local fuel supply results in domestic industrial benefit

33. Heavy Water Production • Produced by ROMAG-PROD located at Turnu Severin • All heavy water requirements for Unit 1 operation and Unit 2 initial load • 350 tonnes of heavy water leased for Unit 1 initial load from Canada returned

34. Key Factors to Success • Extensive pre-project planning to reduce project risk • Continuous development of human resources to balance attrition to other industries • Completion of design prior to start of work at Site • Availability of project management tools to train staff • Capable construction and installation contractors • Smaller number of contracts minimize interface complexities • Development of “do it right first time” culture

35. Key Factors to Success • Ability to stop work to enforce quality • All Site staff to act as quality surveyors • Quality and safety culture accepted at every level • All parties worked to international quality programs • Effective and productive partnership and team work through an integrated organization

36. Concluding Remarks • Cernavoda 1 has resulted in reduction of oil imports of around $150M a year • Nuclear technology has introduces a higher level of technology and QA • Success of Unit 1 operation and Unit 2 completion project has resulted in Romania's decision to complete Units 3 and 4: • Project model is joint SNN and private sector investment • Interest to invest by major European utilities • Project expected to start in 2008 • Romanian companies to play leading role in engineering, construction, commissioning and project management.

37. Beni dinlediginiz icin tesekkurler!!