The Nuclear Free Local Authorities (NFLA) is very disappointed that the public purse will have to fork out over £100 million due to the bungling of contracts for decommissioning Magnox nuclear reactors by the Nuclear Decommissioning Authority (NDA).
After losing a July 2016 legal case in the High Court, amidst comments by the judge that NDA had “manipulated” and “fudged” the contract process when offering the 14 year contract to Cavendish Flour, the NDA has now agreed to settle with Energy Solutions and Bechtel. The legal claim and costs are estimated to be £85 million to Energy Solutions and £12.5 million to Bechtel. A further £50 million may have to be paid to other bidders to reclaim their costs – all of which is public money.
UK Ministers have also decided that the NDA will have to terminate the contract altogether with Cavendish Flour after discovering a “significant mismatch between the work that was specified in the contract … and the work that actually needs to be done”. (1)
As ever with nuclear decommissioning work, the full costs of cleaning up the Magnox nuclear reactors is now expected to cost significantly more than the budgeted £6.1 billion after the discovery of large quantities of asbestos and other significant environmental issues.
According to ‘The Times’, ‘industry sources’ have complained that the Government plumped for an unrealistically low bid for the work at the outset. It is also understood that all options, including taking the work back into state control, are under consideration. The Government have confirmed Cavendish Flour will continue managing the contract for another 2.5 years.
The Energy Minister Greg Clarke has instigated a public inquiry led by the former Chief Executive of the National Grid, Steve Holliday, to investigate why this contract process was so badly dealt with, and who is to blame for these mistakes in both government and the NDA. (2)
Whilst seeing this as yet another mess of the NDA’s making, following on from the problems at the Sellafield site that led it to have to take over NMP’s contract for managing the site, the NFLA is concerned that the gargantuan costs of nuclear decommissioning are simply not being contained. Such work is likely now to cost over £100 billion over the next century, and here again another £150 million is lost – public money that is not being spent on other key services like local government, health and education.
Given such huge overspends, and the ongoing problems EDF, Toshiba and Hitachi are encountering in financing new nuclear reactors, it has to be time to call a halt to new nuclear build and the creation of large new amounts of radioactive waste. The UK Government risks yet more public money lost if it continues to support new nuclear when it is clear we are still struggling to cope with the nuclear legacy.
NFLA Steering Committee Chair Councillor Ernie Galsworthy said:
I am disgusted that the NDA has made such a mess with this contract so that the public are effectively having to pay as much as £150 million to large multinational companies who missed out on the original Magnox decommissioning contract. This litany of incompetence does not just lay with the NDA, but the Government must take some of the blame for not ensuring adequate scrutiny of the NDA’s activities. As the nuclear decommissioning budget balloons ever larger it is surely now the time to give up on the new nuclear project as we simply cannot afford to increase the nuclear legacy budget forever.”
For more information please contact Sean Morris, NFLA Secretary, on 0161 234 3244.
Notes for editors:
(1) The Times, 28th March 2017 http://www.thetimes.co.uk/edition/news/bungled-nuclear-clean-up-deal-costs-taxpayer-100m-qkwtr2mt
(2) Statement by the Energy Minister Greg Clarke to Parliament, 27th April 2017 https://www.gov.uk/government/speeches/nda-settlement-contract-termination-and-inquiry