2.1. Manufactured Capital Management 

This section describes key features of Division project management system, procurement management including procurement results, information about NPP construction and other business performance results.
GRI 308-1, 204-1

Vyacheslav Alenkov,
Director, System Engineering
and Information Technologies

What ensures the efficiency of industrial processes?

The efficiency of industrial processes during capital facility construction is based on the following “three pillars”.

The first one is project management methodology. The company has an approved project management standard and procedures for all the key processes. A project office is established for each project, it functions on the basis of the matrix principle.

The second important element is project management information system on the basis of our Multi-D technology. The system already includes more than 20 tools to control various project parameters. The system is still being expanded. The goal is to establish and commission an information platform to control capital construction facilities during the whole life cycle.

The third element which is often not paid sufficient attention to, but which nevertheless is most important for ensuring efficient project implementation, is the involvement of all the participants into operational processes. The main tool for enhancing the involvement of design personnel is training, and the main tool for enhancing the efficiency of interface between the customer and the contractor is uniting all the participants in a unified information space.

The Division has developed and is actively introducing an innovative project management system for controlling complex engineering facilities construction projects on the basis of Multi-D technology. Which parameters can be controlled more efficiency with the help of Multi-D technology?

Multi-D technology was developed by our company to ensure efficient management of projects for construction of complex engineering facilities. This required a comprehensive approach to establish a number of parameters that can be controlled by the information system.

The basis of the system is an NPP detailed information 3D-model in which a number of other parameters are added which are required to provide a full description of the facility and the processes for its construction. These are such parameters as the construction period, schedules, the required and the available material and human resources, cost, contractual obligations, the regulatory authorities’ requirements and many others. As you see, there are a lot of parameters, hence the name of the system is Multi-D.

How does the company consider the key economic trends in its activities, including transition to digital and platform economy?

Transfer to digital economy is not longer a trend but a goal set by our government. The goal must be met. We are actively involved in the processes as a methodologist and share our best practices. It may sound quite ambitious but we believe that we are capable of establishing our own national industrial and process platform of capital construction facilities life cycles and developing on its basis of an ecosystem which would unite all the participants of the investment process. Such a platform will allow creating added value for goods and services within the framework of digital economy and will allow reducing the costs due to modeling and optimization of the design, construction and management solutions, using reference decisions, performance of routine work by computer software, reducing the time of industrial operation and minimization of the number of mistakes and alterations.

We believe that such digital platform should become an integral industrial and process part of the digital economy and an important component of the new technical era emerging in the course of the fourth technical revolution.

2.1.1. Manufactured Capital Management

The Engineering Division possesses the high-level expertise in the area of complex capital construction project management.

A key to the Company’s success in projects management is availability of Multi-D Technologies – the advanced system of nuclear power plant lifecycle management.

Multi-D technology is aimed at optimization of construction and assembly works and based on detailed planning of the working operations sequence. Main purpose of using Multi-D is reduction of NPP power units construction time period. Application of Multi-D technology allows to plan the construction schedule and eliminate problems at the design stage in order to avoid them at a later, construction stage.

An integrated project management system, with Multi-D technology as one of the key tools, enabled the Company to be the first company in Russia, which got accreditation for the 3-rd competence level in terms of IPMA Delta.

The Multi-D Infrastructure of the Engineering Division can be extended beyond the industry-specific area. It can be also applied as a standard for capital construction project management both in Russian and abroad.

Digital Platform for Complex Capital Projects Lifecycle Management

Complex Project Management System on the Basis of Multi-D Technology

Multi-D® Technology based solutions are replicated on all objects of the Engineering Division.

The Principles of the Project Management System

  • Uniform project management methodology.
  • Lifecycle management technology applied to facilities construction projects, namely Multi-D.

Industry Design System Efficiency Enhancement Programme

The results of the joint work and implementation of the project the branch design technology center projects in 2016:

  • BIM and PIM design boundaries are established as part of the industry solutions;
  • NPP design information model concept is defined;
  • target architecture of the replicable information model and limits of its applicability to nuclear facilities projects are defined;
  • besides, the concept of unified information space (UIS) and limits of its applicability to nuclear facilities projects are established;
  • solutions to expand the strategy of applicable information modelling technologies to nuclear facilities projects, are developed;
  • the management motivation programme called the "Personnel motivation aimed at to reducing costs and timing" has been successfully implemented in the Engineering Division.

In the framework of unified information space forming based on the Multi-D infrastructure tools, JSC ASE EC connected and trained ROSENERGOATOM CONCERN JSC and ROSATOM ICCC users to the automated cost management system.

The International Awards of the Multi-D Project Management System

  • We have become the first Russian company to be awarded the international 3 grade certificate in the area of project, programme and portfolio management based on International Project Management Association (IPMA Delta) model.
  • Our Multi-D project management system has been recognized worldwide by both the nuclear and non-nuclear community. In June 2016, the Group of ASE Companies won the international WNE AWARD competition in the “Operational Excellence” category that was held as part of the World Nuclear Exhibition in Le Bourget (France). The lead was gained by ASE’s “Multi-D Project Management System” Project.
  • By the end of 2016, FIATECH rated among the globally recognized industrial corporations announced ASE to be a winner of the world CETI AWARD2016 competition in the “Mega-Project Multi-Roadmap Element” category. ASE gained the lead with the “Life cycle management based on Multi-D Technology at Rostov NPP” project.

Key Components of Digital Platform for Complex Capital Objects Lifecycle Management

Scrollable table
Tools Description Implementation results / History of success
Multi-D Cost Management The system provides the basement for complex engineering object construction cost management within budget rates.
  • Double reduction of time for searching of the necessary information on the cost.
Multi-D Analytics The system contains capabilities to collect, classify and provide graphic representation of various analytical information about the execution of complex engineering facilities construction projects.
  • Project decision-making process quality improvement.
  • 200 % acceleration in decision-making.
  • Three times reduction of time necessary to hold daily meetings.
Multi-D Helpdesk The system ensures automation of tracking and escalation of the questionable issues that may arise during construction project execution.
  • Twice or three-times reduction of time to solve the problem.
  • More than 90 % of problems are settled at initial stages of the system operation without being escalated to higher levels.
Multi-D Work Packages Automated system of work packages generation, construction process management and information support in terms of logistics, human resources, project time, planning, monitoring and visualization of packages execution at the construction site.
  • Reduction of the total duration of production processes at the Rostov NPP Block 3 & 4 by 100 days.
  • Two-times reduction of injury rates at the Rostov NPP construction site. 5 % enhancement of productivity in field engineering at the Rostov NPP. The overall period of works completion at YuGRES is reduced by 73 days.
  • Multi-D platform and reasonable distribution of weekly-daily work packages and their monitoring facilitated the unique operation, namely: Preparation to RCP welding was carried out at the Rostov NPP Unit 3 simultaneously with the reactor pressure vessel mounting to the proper location.
  • The period of the reactor pressure vessel mounting is reduced to 57 days as compared to the scheduled 60 ones (to compare: installation of the reactor pressure vessel at the Kalinin NPP Unit 4 took 75 days), therefore, the RCP installation and welding processes are given a boost.
Multi-D Document Management Multi-D IMS is the backbone of Multi-D lifecycle management platform and combines all information about capital facility project, such as: requirements, 3D models, work packages, design and operation documentation, costs, risks, project timelines, construction simulation, equipment and materials data, and many others. It also includes comprehensive document management system, which provides capabilities of electronic approval and signoff for all types of documents, as well as data collection, storage, semantic search and access control.
  • The periods of documentation approval process with the Customer are reduced by 3 times from 66 to 22 days (Belarus NPP).
  • The period of documentation approval is reduced by 40 %.
Multi-D Unified Schedule The unique system based on the patented ASE technology that provides coordination and integration of various kinds of network diagrams and schedules into the unified information environment.
  • The power start-up of the Rostov NPP Unit 3 was 2 months ahead of the initial schedule.
  • Mitigated risks of construction and civil works delay.
  • Shortened periods of cross-disciplinary issues settlement.
  • The saving makes 1,478 man-hour/per annum, 996K Rubles per annum.
Multi-D Catalogue System for development of the electronic database, equipment and materials classification codes for complex engineering facilities, including their technical description, supporting documentation and 3D models. The system also facilitates the interface between the suppliers and sub-contractors.
  • Reduces design time to search for equipment 3D models through a single electronic catalogue, which includes 99 % of the required models, uploaded by equipment suppliers and manufacturers.

The Main Spheres of the Engineering Division Project Management System Sustainable Development

  • MULTI-D platform instruments replication.
  • Elaboration of PMC offer for customers in Russia and around the world. Engineering Division has an extensive expertise as a PMC-services provider and is ready to work for infrastructure, conventional energy, metallurgy, shipbuilding and other markets, which produce complex capital projects.
  • Partner relationship with Russian and foreign companies outside nuclear power industry.
  • Suppliers, regulators, partners and customers using the Unified Nuclear Industry Identification Catalogue of Equipment and Materials (UNICEM) product, are invited to the outlet of engineering services and equipment, i.e Multi-D outlet (as a multi-purpose, efficient and transparent tool for quick retrieval of the required equipment and services specification and qualification of project-involved suppliers).
  • Development of a new standard for capital construction objects lifecycle management.

Engineering Division succeed in design and implementation of project management system for infrastructure, thermal power generation, metallurgy and shipbuilding facilities

Procurement Procedures Management

Procurement procedures in the Engineering Division are performed within the Unified Industry Procurement Standard (Procurement regulations) of ROSATOM (hereinafter referred to as – UIPS). One of the primary purposes of procurement activities is to expand the opportunity to participate in procurement for a maximum number of bidders.

Procurement management objectives: arrangement and holding procurement procedures regarding the selection of suppliers for goods, works, services as per the approved annual procurement program (hereinafter – APP).

Legal and methodological provision of procurement procedures in the Engineering Division’s organizations, as well as concluding supply contracts for products (goods, works and services) for NPP under construction within the time period stipulated in the UIPS and procurement documentation.

Central Arbitration Committee (CAC) of ROSATOM and General Inspector carry out monitoring in the field of procurement.

Procurement management plans for 2016:

  • Olding over 2,287 competitive procurement procedures by the Division organization for the amount of 141,897.326 mln rubles.
  • Fulfillment of provisions of the Government Decree of the Russian Federation No. 1352 dd. 11.12.2014 "On Peculiarities of Participation of Small And Medium-Sized Business Entities in the Procurement of Goods, Works, Services by Certain Types of Legal Entities".

Results of plans implementation for 2016:

  • During 2016 procurement was made according to APP and on the basis of NPP power units milestone construction schedule.
  • Within implementation of the Government Decree of the RF dd. 11.12.2014 No. 1352 a list of products procured solely at small and medium-sized business entities (hereinafter – SME) was updated and placed on website www.zakupki.gov.ru.
  • The Division's organizations, within the established time limits placed annual reports on procurement of goods, works, services by certain legal entities at SME in the Unified Information System.

Procurement management plans for 2017:

  • Publication of the annual procurement program in the unified information system.
  • Procurement of long lead equipment for Kudankulam NPP, Units No. 3, 4, Rooppur NPP, Units No. 1, 2, Kursk-2 NPP, Units No. 1, 2, El-Dabaa NPP, Units No. 1–4;
  • Fulfillment of provisions of the Government Decree of the Russian Federation No. 1352 dd. 11.12.2014 "On Peculiarities of Participation of Small And Medium-Sized Business Entities in the Procurement of Goods, Works, Services by Certain Types of Legal Entities".

Procurement Optimization in the Engineering Division

In the reporting year a unified document was issued regulating the interaction procedure between structural subdivisions and the Division’s organizations’ officials- “Organization of procurement activities in JSC ASE EC and its managed organizations” corporate standard (hereinafter – CS).

This CS improves and unifies the process of procurement procedures, as well as ensures the Company’s interests and safety when carrying out procurement procedures, selecting suppliers, contractors and performers.

According to the Engineering Division requirements on the necessity to reduce NPP construction time and cost, in 2016 for the first time in the industry a unique system of procurement unit employees motivation was created on the basis of using standards and developed taking into account best practice of labor efficiency.

Fulfillment of equipment contracting schedule was determined to be the unconditional task to be performed. Based on the annual schedule of equipment contracting, monthly loading rates of subdivisions are calculated, and on the basis thereof man-loading rates are determined, i.e. a number of items an employee should work out at his stage and hand-over to the next stage of contracting process. In this developed personnel motivation system the standards are calculated and established taking into account the actual number and qualification of employees.

There are following advantages of the new motivation system:

  • high involvement of the personnel by means of setting a team labor productivity indicator;
  • reduction of project implementation time period by means of material interest of employees in performance of large scope of works;
  • growth of labor productivity in view of high work quality assurance and loss reduction.

Mid-term plans: reduction of procurement procedures time period and a share of sole supplier procurement, as well as the procurement affecting KPI.

(GRI 308-1) Requirements to suppliers and contractors are determined according to Annex 10 to UIPS and mean that a procurement bidder shall have a civil and special legal capacity, the rights to carry on business activity pursuant to the legislation, that he is not in the process of winding up (for legal entity), as per the requirements established on the basis of the RF Government instructions, a procurement bidder shall have the relevant financial capability level. Also, procurement bidders shall be checked for non-availability of their information in the registers of bad-faith suppliers, absence for the last 2 years of information regarding the established facts and incidents within procurement.

Procurement Procedures Results

The Engineering Division is the major and sustainable customer that meets legislation requirements strictly, including the tax and anti-corruption legislation. These circumstances provide conditions for steady operation of suppliers and contractors, for the growth of tax revenues to the budget at all levels.

Besides, the Engineering Division exerts an influence over suppliers and contractors providing preferences according to the RF legislation. In particular, preferences are provided to small- and medium-sized businesses and several other subjects in relation to which the law prescribes respective requirements.

(GRI 204-1) The Engineering Division does not provides any preferences to suppliers depending on the supplier’s locality in respect of the region of operations. The choice of suppliers can be decided upon only by the supplier’s meeting requirements and criteria stipulated in the procurement documentation. The winner of a specific procurement is decided upon according to the procurement documentation. In this report, the local supplier is understood as an organization whose address is localized in the region of NPP construction, for example, in respect of the Belarus NPP, the suppliers located in the Republic of Belarus are considered to be the local ones. Proceeding from this definition, the share of expenditures on “local suppliers” in the regions of construction makes ~ 5.68 % of the sum total of all contracts concluded in 2016.

Scrollable table
The Share of Procurements from Local and Foreign Suppliers, %
Name of legal entity 2014 2015 2016
JSC ASE
• from local producers 99.81 99.57 99.35
• from foreign producers 0.19 0.43 0.65
JSC ASE EC
• from local producers99.7689.5684.49
• foreign producers0.2410.4415.51
JSC Atomenergoproekt
• from local producers89.1588.5885.55
• from foreign producers10.8511.4214.45
JSC ATOMPROEKT
• from local producers86.5080.4259.36
• from foreign producers13.5019.5840.64
JSC Energospecmontazh
• from local producers99.90100.00100.00
• foreign producers0.10
JSC SPB NIII EIZ
• from local producers95.93100.00100.00
• foreign producers4.0700.00
JSC NIKIMT-Atomstroy
• from local producers99.99998.8299.66
• foreign producers0.0011.180.34
Engineering Division succeed in design and implementation of project management system for infrastructure, thermal power generation, metallurgy and shipbuilding facilities

2.1.2. Business Performance Results

NPP Construction in Russia

Rostov NPP

Key Milestones in 2016
  • 02.06.16 – Installation of the reactor coolant pipe at Unit No. 4 is completed.
  • 03.10.16 – Installation of the Pressurizer pipelines at Unit No. 4 is completed.

Leningrad NPP-2

Plan for 2017
  • The Engineering Division continues works as part of the PMC-contract for LNPP-2, i.e. issuance of the agreed working documentation, implementation and support of the “Integrated schedule” system.

Novovoronezh NPP-2

POWER UNIT 1

Key Milestones in 2016

  • 22.03.16 – The Federal Environmental, Industrial and Nuclear Supervision Service issued to ROSENERGOATOM CONCERN JSC a license for the nuclear plant operation.
  • 24.03.16 – Beginning of fuel loading.
  • NPP Unit belonging to the Generation III+ achieved 100 % power level and provided the first 240 MW of electricity to the national grid system.

Plan for 2017

  • 27.02.17 – Handover to manufacturing operation mode.

POWER UNIT 2

Key Milestones in 2016

  • 15.09.16 – Welding of the reactor coolant pipe was completed within the recordshort time (72 days against 96 days at the Rostov NPP).
  • 03.10.16 – Concreting of the outer containment dome was completed.

Kursk NPP-2

Key Milestones in 2016
  • 03.06.2016 – Rostechnadzor issued a license for construction of the Power Unit.
  • 08.07.2016 – Design documentation was approved based on the Decree of ROSENERGOATOM CONCERN JSC.
  • 09.06.2016 – Permit for construction was received.
  • Excavation of the pits for Power Unit 1 and 2, installation of the utility systems and construction of the power substation.
Plan for 2017
  • Provision of the construction site availability for the main construction works (it is necessary to complete the works on construction of the sand and sand-and-gravel foundation under the main Unit 1 building and ensure operation of the prioritized construction base facilities).

NPP Construction Abroad

Tianwan NPP (China)

POWER UNITS 3&4

Key Milestones in 2016

  • Preparation to power unit No. 3 startup(completion of the main thermal works at the reactor plant, water circulation in the open reactor for preparation to hydraulic tests and circulation washing of the primary circuit).
Plan for 2017
  • Power unit No. 3 physical start-up.

Kudankulam NPP (India)

Key Milestones in 2016

  • Official power unit No. 1 start-up procedure.
  • 11.05.16 saw the beginning of Power unit No. 2 physical start-up.
  • Power Unit 2 was connected to the grid of the Republic of India.
  • The Indian Regulatory Authority authorized the beginning of works for power units 3&4 construction.
  • Excavation of the foundation pit prior to the concreting of the foundations for Power Unit 3 and 4.
  • Preparation of the general framework agreement for power units 3&4 construction and a set of documents hereto.
  • Preparation for signing of the general framework agreement for power units 5&6 construction and a set of documents hereto.
Plan for 2017
  • Preparation of the pit for the foundation, handover to the customer of the necessary documentation for obtaining of the Indian Regulatory authority's permission to make the first concreting of power unit 3.
  • Delivery of the design documentation, equipment and materials.
  • Beginning of the first concreting in the units foundation plate.
  • Signing of the general framework agreement for power units 5&6 construction and a set of documents hereto.

Bushehr-2 NPP (Iran)

Key Milestones in 2016

  • On 10.09.16 the groundbreaking ceremony took place.
  • Saw beginning of the works for digging the foundation pit under power unit No. 2 main buildings.
Plan for 2017
  • Development and handover to the Principal of the detailed design documentation Digging of the foundation pit of power unit 2 main buildings.
  • Site handover by the Principal.

Hanhikivi-1 NPP (Finland)

Key Milestones in 2016

  • Licensing stage of the NPP construction project – preparation of the design documentation for project licensing, agreement with Fennovoima and submission of documentation packages to STUK.
Plan for 2017
  • Preparatory works at the site, assembly of primary civil engineering and service objects.

El-Dabaa NPP (Egypt)

Key Milestones in 2016

  • The contract preparatory works for NPP construction are finalized.
  • 13.01.16 – the Intergovernmental Agreement on NPP construction was ratified and entry into force.
  • The 1-st stage of preliminary engineering survey was held at the NPP site.
  • The EPC-Contract for construction of 4 x 1200 MW-power-unit NPP was agreed upon with conditions precedent.
Plan for 2017
  • EPC-Contract entry into force.
  • Elaboration of preliminary safety analysis report and basic design documentation (power units Nos. 1, 2).

Belene NPP (Bulgaria)

Key Milestones in 2016

  • Bulgaria reimbursed the cancellation of the Belene NPP construction project.
Plan for 2017
  • Start of shipment to Bulgaria of the main equipment manufactured.

Paks NPP (Hungary)

Plan for 2017
  • Obtaining the Hungarian Regulatory authority’s permission for the Paks-2 NPP site upon obtaining the European Commission’s decision.

Rooppur NPP (Bangladesh)

Key Milestones in 2016

  • 31.05.2016 – The Bangladesh Regulatory Authority (BAERA) approved the Rooppur NPP project.
  • 31.05.2016 – The Parties completed agreement and signing of all the remaining appendices to the General contract.
  • 21.06.2016 – In the course of Joint Coordination Committee Meeting, Bangladesh Atomic Energy Regulatory Body (BAERA) officially submitted a site license for Ruppur NPP to the Customer.
Plan for 2017
  • Beginning of concreting of the power unit 1 reactor building foundation plate.

Akkuyu NPP (Turkey)

Key Milestones in 2016

  • The Turkish legislation was modified with respect to simplification of the licensing process.
Plan for 2017
  • Approval of Akkuyu NPP design parameters by the Turkish party.
  • Submission of the revised PSAR and PSA to JSC AKKUYU NÜKLEER.

Belarus NPP (Belarus Republic)

Key Milestones in 2016

  • The polar crane was installed at the power unit No. 1 reactor building.
  • The device of the shell was implemented the power unit No. 1.

Plan for 2017

POWER UNIT NO. 1

  • Completion of the reactor vessel installation.
  • Completion of RCP welding.

POWER UNIT NO. 2

  • Erection of the reactor pit is finalized.
  • Installation of the polar crane is finalized.

Construction of RAW and SNF Management Facilities, NRHF Decommissioning

The Engineering Division’s main achievement in 2016 is the tender for Kozloduy NPP radioactive waste storage facility construction (Bulgaria) and development of the documentation for dismantling of the equipment at Kozloduy NPP power units 1–4. The tender was won in July by Nukem Technologies, member of the German- Bulgarian and German-Russian Consortium.

In 2016 the Spanish Intecsa Industrial Engineering company held the tender for supply of RAW management equipment. The tender was awarded to Nukem Technologies GmbH with the subsequent award of the Contract on 21.12.2016. The contract includes the works for supply of the RAW cementation equipment (RAW cementation plants and auxiliary equipment) to the waste disposal plant to process hazardous industrial wastes that build up as a result of oil companies’ operation, in Ruwais industrial region (UAE).

During the year, the Engineering Division’ current projects continued to be implemented as part of the active contracts at the Ignalina NPP (issuance of the operation license for the SNF interim storage facility), FSUE “Mayak”, as well as within the modernization and construction projects of on-site RAW management facilities at existing NPP (Kursk NPP-1, Smolensk NPP), as at NPP under construction (Belarus NPP, Kursk NPP-2, Paks NPP etc.)

Project Management Consulting Services (PMC-services)

Creation and improvement of its own information platform mainly for the effective implementation of projects in the business core enabled The Engineering Division to obtain one of the most efficient tools for project management outside the nuclear industry and provided opportunities for effective competition in the consulting services market our of main business core.

The company has started to actively develop Project Management Consulting (РМС) services, such as first consulting contract outside of energy industry has been signed with “Skorostnii magistrali” company, the subsidiary of JSC "Russian Railways", our strategic customer.

In 2017, the Division plans to remain at least in this trend of signing new contracts in this market sector, while the priority is given to the increasing references outside the nuclear industry.

To achieve these goals, the Company will continue to develop the unified information platform and Multi-D system. Implementation of projects with Russian and global partners aims to extend the functional character of the platform and enhance its efficiency.

Construction of Research Reactors, Low- and Medium-power Reactors

In 2016, much work was carried out together with Rusatom Overseas Inc., to obtain new contracts in this market segment. The markets in Africa and South America are the prioritized ones. Implementation of such projects is essential for the development of these regions, in terms of foundation of the new industry that requires new educational programs and new jobs in the country.

Company goal in 2017 is signing of a new foreign contract. Taking into consideration the scope of the market, being awarded at least 1 contract per year is a prerequisite for achieving leadership positions in the segment. This task is performed with the support of "Rusatom Overseas Inc."

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