Atomic Energy Authority arm to be privatised

THE GOVERNMENT is to split the United Kingdom Atomic Energy Authority and privatise its commercial arm.

Plans for the sale, which industry observers say could raise about pounds 200m, were attacked by unions as 'the ultimate madness' and as a potential precursor to privatisation of the rest of the nuclear industry.

The Institute of Professionals, Managers and Specialists said that at least 2,700 jobs would be lost and Britain would lose an important reservoir of science and technology skills. However, Tim Eggar, energy minister, said the plans were a logical next step in the development of UKAEA. He said no decision had been taken on the form of the sale.

From April the authority will be split into three parts including a commercial division, which will be sold to the private sector and will include industrial technology, safety and risk assessment, environmental services and consultancy.

This division will initially employ 4,000 people and have a turnover of between pounds 250m and pounds 300m next year.

A government division will contain the nuclear plants and liabilities and will remain in state ownership. The nuclear facilities include a number of experimental reactors that are being shut down and need to be decommissioned as well as the fast reactor at Dounreay in Scotland, also soon to be closed.

A third division, providing services such as catering and transport, will sell its wares increasingly to other organisations and may be sold off as a separate entity. The UKAEA is likely to seek a joint venture partner for the general services business.

Sir Anthony Cleaver, UKAEA chairman, welcomed the announcement. He said he would be interested in taking part in a management buyout of the commercial arm, adding that it should be sold as a single entity.

Technology and skills developed originally to service the nuclear sector were now finding applications in many industries, including chemicals and process control.

'That is where we see a huge market and where we have the ability to become a world-class company,' he said. Sir Anthony hopes that the privatisation will be completed by the end of 1995.

The Atomic Energy Authority has a total turnover of pounds 400m, of which pounds 60m comes from overseas business. The operation has lost money in the past few years due to a restructuring that has resulted in the loss of 2,500 jobs.

Sir Anthony said government and public bodies accounted for 60 per cent of revenue, but this could shrink to less than half before long.