BNFL sale put on back-burner

Plans to partially privatise BNFL have been put back to after the next General Election, Energy Minister Helen Liddell said today.

The Government had hoped to raise up to £1.5 billion by selling parts of the company, but Mrs Liddell said today that recent events at the Sellafield plant in Cumbria, which the company operates, had been "a setback" to the scheme.

Any sale would have to be delayed until BNFL has had time to respond to Health and Safety Executive reports on the Sellafield site by improving its safety and commercial performance, she said.

The earliest possible date for the introduction of any element of public-private partnership would now be late 2002 - after the latest possible date for the election of May 2002 - said Mrs Liddell.

Earlier, Prime Minister Tony Blair insisted that Sellafield's future was "sound and secure" despite recent scandals over safety breaches at the site, falsification of documents for reprocessed material sent to Japan and calls for its closure by the Irish and Danish governments.

During Prime Minister's Questions, Mr Blair told the Commons: "Ministers have made it very clear to the chairman of BNFL that we want to see big changes in the way BNFL is run and managed.

"I do think it's important to emphasise to people the Health and Safety Executive have given safety clearance to reprocessing.

"The workforce are immensely dedicated and talented and skilled people and I am quite sure with their dedication and their talent, the clearance with the Health and Safety Executive, and the new plan that will be submitted, BNFL can go back on a sound and secure footing for the future."

BNFL's new chairman was due to report back to trade and industry ministers in early April on how safety would be further improved, Mr Blair added.

The Government had planned to sell up to 49% of BNFL, which is one of the world's biggest suppliers of nuclear services, before the election.

But Mrs Liddell said today in a written statement to the Commons: "Recent events at BNFL have clearly been a setback for the company.

"It is important that BNFL now responds positively to the HSE's reports on the Sellafield site and works to achieve necessary improvements in its safety and commercial performance.

"This will take time. As a result, it now appears that the earliest possible date for the introduction of any PPP into BNFL could not be before the latter part of 2002.

"The introduction and timing of any PPP remains subject to BNFL's performance against the targets set by Government as well as the further work being undertaken by Government and its advisers."

BNFL has an annual turnover of around £2 billion, some 40% of which comes from fuel manufacture and reactor servicing, which have not been affected by recent controversies.

Around a quarter of the company's work involves the operation of Magnox nuclear power stations in the UK, including Sellafield, while a further 10% involves clean-up operations.