Following a series of arbitration talks between Taiwan Power and General Electric Co. over the sealing of Taiwan's fourth nuclear power plant, Taipower has agreed to pay GE a compensation of US$180.5 million, or NT$5.5 billion. Taipower says it has already allocated a compensation sum in its budget in 2014 and the agreement will not hurt the company's financial status or electricity prices.
Taiwan's government announced the sealing of the island's fourth nuclear power plant in April 2014. Taiwan Power, which had a construction, equipment and service contract with General Electric, subsequently stopped paying the company. GE then filed two arbitration cases against Taipower at the International Chamber of Commerce. The chamber ruled against Taipower in the first case. With Taipower believing it would probably lose the second case as well, the two sides entered into arbitration. Following five sessions, the two sides agreed Taipower would pay GE US$22.5, or NT$701 million.
Of the total compensation amount, over US$30 million was for facilities already transferred over by GE. At the time, (Taipower) stopped paying (GE) because checks upon delivery and function tests were never completed. Following the result of the first arbitration, Taipower and its legal team decided to minimize its losses by negotiating an out-of-court settlement with GE.
The first ruling came down in March, with the chamber ordering Taipower to pay GE US$158 million, or NT$4.87 billion. Taipower paid the sum immediately. With a precedent now in place, Taipower opted to settle the second case out of court and agreed to pay GE US$180.5 million, or NT$ 5.585 billion.
This proves the fourth nuclear power plant couldn't have been built well. This is an unfinished building that was never going to be completed. Even the guy that drew up the original blueprint couldn't find a way to solve this problem.
Taipower says it allocated funds for these payments to its budget in 2014 and the case is at an end. It also said the payments will not affect the company's bottom line or electricity prices this year.