BNFL warns on nuclear plants

MARY FAGAN

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.

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'