BNFL pledges to revive nuclear power industry

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Industrial Correspondent

State-owned British Nuclear Fuels has made a surprise pledge to revive nuclear power in Britain and may take the lead role in seeking the billions of pounds needed for new generating stations, it emerged last night.

Addressing a meeting of nuclear engineers, BNFL's chief executive, Neville Chamberlain, openly attacked the Government - its shareholder - as "parochial and short-sighted" for refusing to support further nuclear plants.

Mr Chamberlain's outburst will throw into confusion the current debate over the nuclear industry in the UK, which will come under the spotlight again next week when the Trade and Industry Select Committee continues its inquiry into the privatisation of British Energy, the main UK producer of nuclear energy.

The missive from BNFL follows the recent decision by British Energy to abandon plans for two new reactors at Sizewell and Hinckley. Mr Chamberlain said: ''Other players are trying to distance themselves from their heritage. It is clear that BNFL now is the nuclear industry in the UK."

Martin O'Neill, chairman of the Select Committee, said last night that BNFL's stance could affect the privatisation as an expanding state-owned nuclear generator could become a competitive threat. "I would want to hear whether BZW and other advisers have views on this," he said.

Mr Chamberlain said: "Recent events have shown that if there is to be new investment BNFL may need to lead rather than support and we are prepared to do that."

Mr Chamberlain also said BNFL may ask to inherit the sites that had been earmarked at Sizewell and Hinckley for any new plants. The company is already set to become a significant generator.

A spokesman for BNFL said that while the company's role as a direct investor might be limited, it would be prepared to lead the way in negotiating with the international banking and nuclear communities. BNFL, which is primarily a nuclear fuel services company, already has substantial customers and connections overseas.

Although BNFL is owned by the Government, it is established as a plc and has certain freedoms to make investment decisions and operate as a commercial company.

It has in recent years been heavily marketing its services in the US, Asia and Europe and is among the UK's leading exporters.

Mr Chamberlain also warned that BNFL would demand assurances from the Government over the funding of the multi-billion-pound liabilities for the Magnox plants.

He said that Magnox would be set up as a separate subsidiary, Magnox Electric, which would be a "separate unit from all of BNFL" and would not include BNFL's two existing power plants.

Mr Chamberlain said: ''As an international company seeking to penetrate new markets around the world, our credibility is influenced by the health or otherwise of our balance sheet and we cannot have that distorted by liabilities attached to Magnox Electric. As a plc, BNFL cannot take on a net liability and we shall be discussing with the Government in some detail how this aspect is to be handled."

Mr O'Neill said that the decision not to integrate Magnox Electric made a nonsense of the Government's arguments that it would create synergies by giving the reactor family to BNFL.