BNFL vows to go ahead with privatisation

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BRITISH NUCLEAR Fuels, the state-owned reprocessing company, maintained yesterday that it was on course for partial privatisation, despite the controversy over faked safety records at its Sellafield plant and a sharp increase in operating losses last year.

The company also insisted that the disclosures about falsified quality control records at its prototype mixed-oxide fuel plant would not affect plans to start full-scale commercial production in a pounds 300m facility built at Sellafield.

BNFL has suspended three employees and is being investigated by the Nuclear Installations Inspectorate after it emerged that records relating to the production of MOX fuel - a mixture of uranium and recycled plutonium - for Japanese customers had been falsified.

John Taylor, BNFL's chief executive, said: "This is not a safety issue, it is a product quality issue." He added that the fact that the faking of records had been detected before the fuel left Sellafield showed BNFL's safety procedures were working properly.

He was speaking as BNFL reported a pounds 62m operating loss due to a number of one-off write-offs and losses on Magnox stations. At the pre-tax level, profits rose 42 per cent to pounds 228m, boosted by pounds 181m of interest income. The group is aiming for a further 5 per cent reduction in costs this year and will shed another 400 jobs from next March.

Mr Taylor said that MOX fuel fabrication could generate pounds 1bn of sales over a 10-year period once commercial production began, probably in early 2001.

There is speculation that BNFL will follow up its acquisition of Westinghouse's nuclear fuel services business earlier this year with a bid for Siemens' nuclear division which has sales of about pounds 400m. But Mr Taylor said he could not comment on any talks BNFL might be involved in.