BNFL warns on nuclear plants


Industrial Correpondent

British Nuclear Fuels has warned the Government it will not take on the ageing Magnox nuclear power stations without 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 key element in the Government's pounds 3bn plans to privatise Nuclear Electric and Scottish Nuclear by mid-1996.

John Guinness, chairman of BNFL, said: "The Government cannot force us as a plc to take these liabilities on. If the board does not agree [to do so] they can remove the board. I do not want to be chairman of an insolvent firm."

He added: "As directors we have to behave responsibly. We welcome the Magnox plants in principle, but we attach great importance to the issue of liabilities and the terms have yet to be made clear."

The Magnox plants have estimated liabilities of about pounds 9bn related to decommissioning and the management of radio-active waste. The problem of liabilities forced the Government to pull nuclear out of the privatisation of the electricity industry five years ago.

Mr Guinness was speaking as BNFL, which processes and manages waste for companies in the UK and overseas, announced a fall in pre-tax profits last year to pounds 74m from pounds 81m the previous year after exceptional charges.

Profits would have been pounds 180m higher but for price concessions for Nuclear Electric and Scottish Nuclear as a result of the renegotiation of contracts worth pounds 18bn to BNFL over a period of years. BNFL also paid pounds 38m to help fund UK Nirex, the organisation set up to find burial sites for nuclear waste.

Mr Guinness said that underlying profits grew by 7 per cent and that the company had increased its dividend to the Government by 70 per cent to pounds 45m. "The increase is a sign of faith in our future growth and profitability."

It was up to the Government to decide whether to sell BNFL at some stage and his prime concern was to run it as a fully commercial organisation.

He said BNFL had guarantees from the Treasury that its commercial status would not be affected by the decision to bring the company back within the public sector borrowing requirement.

BNFL tripled its export earnings to almost pounds 425m last year, mainly as a result of the opening of the Thorp reprocessing plant after a year of regulatory delays. Exports account for one third of turnover, rising to a projected 75 per cent by the end of the decade.

Should plans to transfer the Magnox plants proceed, BNFL will have 8 per cent of the UK's electricity generating capacity. The company already has a Magnox station at Sellafield in Cumbria and another at Chapel Cross in southern Scotland, but these supply BNFL's own needs as well as selling some into the nation's electricity trading system.

The addition of the six Magnoxes operated by Nuclear Electric and Scottish Nuclear would increase BNFL's turnover by about pounds 500m.

Life and Style
A teenager boy wakes up.
Life and Style
It is believed that historically rising rates of alcohol consumption have contributed to the increase
food + drink
An Apple iPhone 6 stands on display at the Apple Store
businessRegulators give iPhone 6 and 6 Plus the green light
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
Britain's internet habits have been revealed in a new survey
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Arts and Entertainment
Arts and Entertainment
The White Sails Hospital and Spa is to be built in the new Tunisia Economic City.
architectureRussian billionaire designs boat-shaped hospital for new Dubai-style Tunisia Economic City
Arts and Entertainment
Life and Style
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
Life and Style
food + drink
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
Arts and Entertainment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style