British Nuclear Fuels warned yesterday that its growing international business could be seriously threatened by government plans to load it with the ageing Magnox nuclear power stations, unless there are guarantees of funds to cover billions of pounds of liabilities associated with the plant.
The transfer of six Magnox stations to state-owned BNFL is a vital part of the Government's pounds 3bn plans to privatise Nuclear Electric and Scottish Nuclear by the middle of next year. But John Guinness, the chairman, said that the company would refuse to take them on anything but a commercial basis and that, if necessary, the Government could "remove the board" of directors.
Mr Guinness said: "As directors of a plc we have a duty to take decisions only on a commercial basis and the Government cannot force us if we reject the proposal." He said that as yet there were no details as to how the liabilities would be covered and that the issue needed to be resolved.
Speaking before the House of Commons Trade and Industry Select Committee, Mr Guinness said that BNFL's increasingly important overseas customers would be "very unhappy" if the transfer of Magnox was unsatisfactory as much of BNFL's funds came from advance payments for nuclear management and reprocessing. Last year BNFL exports trebled to almost pounds 425m. They now account for one third of turnover and are expected to reach 75 per cent by the end of the decade.
Mr Guinness also said that he was not consulted over government claims that merging Magnox with BNFL would produce pounds 900m in savings. He told the committee: "We do not have any idea how they arrived at that figure. I would regard it with caution."
The Magnox plants have estimated liabilities of about pounds 9bn related to decommissioning and the management of radioactive waste. This problem forced the Government to pull the nuclear power plant out of electricity privatisation five years ago. Mr Guinness said that the addition of Magnox to BNFL would give an "added dimension" to the company but that it would "certainly be a problem" should the Government plan at any time to privatise BNFL.Reuse content