In the absence of company logos, a small, glass-encased disc of vitrified waste, marooned, lonesome, in the empty waiting area, and a few framed photographs of power stations and reprocessing plants, are the only clues that this is the London base of that scourge of environmentalists, British Nuclear Fuels Limited.
John Taylor, chief executive of BNFL for three years, seems embarrassed by his London offices, round the corner from Buckingham Palace, particularly since Rolls-Royce, the building's owners, have emphasised the comparative shabbiness of BNFL's floor by tarting up the foyer downstairs. "It is not our headquarters, just a place we rent when we are in London," says Mr Taylor's PR minder. A swisher BNFL, smothered in logos, and other de rigueur corporate accoutrements, operates from Risley, Cheshire.
Mr Taylor's good-humoured excuse for the absence of Conran-style splendour is that since he joined BNFL - becoming the highest paid chief executive in the public sector, with a package worth pounds 323,000 for the year till April 1998 - he has been rather preoccupied with other things. He has been transforming BNFL from a Cumbrian-based, nuclear reprocessing company (ie Sellafield, the reprocessing plant previously known as Windscale) into a global nuclear enterprise, in which power generation and nuclear clean-up - a boom area in the aftermath of the Cold War - are offered alongside BNFL's traditional service.
But a make-over for the London office is now surely on the cards. For BNFL and its relatively unknown chief executive are to be thrust into the spotlight following the government's announcement last week that up to 49 per cent of the state-owned company will be privatised before the next election.
The partial privatisation is expected to net the government about pounds 1.5bn. BNFL also hopes it will turn Mr Taylor's global vision into a reality. But it looks no cake- walk. Some City watchers say the nuclear company is so controvercial - politically and economically - that its privatisation will be one of the most difficult ever undertaken.
If Mr Taylor is feeling the pressure, he is a master of deception. He bounces into the interview, as fresh as his surroundings are tired, glowing (if that is not too indelicate a term for the head of a company sitting on a 50-tonne stockpile of separated plutonium) with all-round, general good health. Frayed captains of industry take note. Mr Taylor's retired matinee idol looks owe everything to his belief in the balanced life. He advocates relaxation, not work, on the weekend. Now, at 52, he just watches the rugby he played at university, but he stays in shape by sailing, jogging and playing squash. "He has a very easy-going style and always looks as if he has just come from a health spa," says one nuclear industry insider.
This is already more than was previously known about him. When Mr Taylor became BNFL chief executive it seemed the appointment of the mystery man. Newspaper cutting files contained little or nothing about him (not much has changed), and the biography released by BNFL to journalists revealed only that Mr Taylor was a graduate of Swansea University, with a honours degree in engineering, and he was married with three daughters.
The CV also showed Mr Taylor had been the quintessential company man, having spent his entire career with the American oil giant Exxon, rising to European vice-president of its polyolefins business (industrial polymers) in 1990. "It is not because I am a shrinking violet that so little is known," says the affable Mr Taylor, who, despite being a six-footer, still seems swamped by his big Jimmy Savile chair. "For 16 of the years with Exxon I was living outside the country, mainly in Brussels."
So what caused a life-long oilman to go nuclear? A family decision came first, he says. His wife and three daughters - then aged 13 to 19 - wanted to return to Britain. Exxon had asked him to move to Texas. "BNFL came up as a prospect. It was another energy-related challenge before I got too old." He was not really joining the public sector; BNFL's privatisation was already mooted. A challenge, he says, is exactly what BNFL has turned out to be. "There have been easier companies to float," says Mr Taylor. "Some people think I am a masochist."
The road to flotation is strewn with obstacles. The City has previously showed a lack of enthusiasm for nuclear power. At the end of 1989, a last-minute decision by bankers not to touch it at any price, led to a panicked extraction of nuclear stations from the flotation of Britain's electricity generating companies.
Six years later Scottish Nuclear and Nuclear Electric's nuclear power stations were successfully privatised but only after 11 of the oldest reactors - the Magnoxes - were hived off. When British Energy became their new, combined, customer-comforting, nuclear-free title, the flotation was mischievously dubbed "the privatisation that dare not speak its name".
Potential buyers of BNFL shares must accept that anti-nuclear campaigning has helped shrink the global nuclear industry, and will continue to gnaw at what is left. Every decision taken by BNFL is politically charged, and every move monitored by powerful environmental groups. A minor scare, or worse a disaster such as Chernobyl or Three Mile Island, could ruin an industry which has yet to find a long-term solution to its nasty by- product, tonnes of highly-dangerous, radioactive waste, whose toxicity and bomb-making potential leave many generations at risk.
But Gordon MacKerron, a nuclear industry expert at Sussex University, says economics, not politics, is the main difficulty with BNFL's privatisation, and the single biggest factor in the stagnation, or contraction, of the global nuclear business.
In nuclear power's Golden Age, it was heralded "as too cheap to meter". In fact, it has proved prohibitively expensive, particularly for a private sector motivated by the quick buck and low capital investment, with an inbuilt reluctance to shoulder the nuclear industry's huge liabilities (the projected costs of the decommissioning of power stations, reprocessors and reactors somewhere down the line). That explains why Japan is among the few countries still building nuclear power stations.
BNFL's liabilities were massively swollen by its absorption of the outcast, state-owned Magnox reactors, after the British Energy sale. Total undiscounted liabilities stand at pounds 27bn, and environmentalists dispute the company claim that almost all of this is already covered. Mr Taylor says he is the delighted owner of a Magnox fleet, but it is no secret the company felt it was being lumbered with the Magnoxes, universally dismissed as rustbuckets and accidents waiting to happen. If all this was not enough, the future of reprocessing - still 25 per cent of BNFL's business - is in doubt as countries, under pressure from environmentalists, consider whether storing nuclear waste is not preferable, on economic as well as environmental grounds. Friends of the Earth say even Japan, the world's "gung-ho reprocessor" and a big BNFL customer, is beginning to ask. If true, there is a shadow over Sellafield's pounds 2bn Thorp reprocessor, dependent on Japanese contracts.
The German government, propelled by a coalition with the Greens into a public pledge to move from nuclear power, recently failed to break pounds 1.2bn reprocessing contracts with Sellafield. The contracts are binding until 2004, and BNFL has not minced words about what will happen if they are not honoured - Germany's radioactive waste would be returned sharpish, no doubt sparking another public crisis.
Yet Mr Taylor appears unruffled. Perhaps his secret is that he is not one of BNFL's bright-eyed true "believers", the remnants of the old nuclear weapons programmes so determined to see a peace-time use for their technology that they pushed nuclear power as the one-stop, miracle solution to the world's energy woes, even as the plutonium was piling up.
"I came to BNFL as a businessman," says Mr Taylor. That does not mean he does not expect world opinion eventually to swing back in nuclear energy's favour. "With energy it is hard to forecast the future," he says. Forecasting crude oil prices taught him that much. But he believes one projection is hard to ignore - that energy demands will quadruple in 50 years. And even the most ardent supporters of renewable energy, he claims, do not suggest it could fill the gap, now that nuclear power stations provide 27 per cent of the Britain's electricity and up to 80 per cent in countries such as France.
And Mr Taylor seems to see the concern about CO2 emissions from fossil fuels as the nuclear industry's knight on a white charger. "There is still the issue of what to do with spent [nuclear] fuel," he says, combining euphemism with understatement. "But where does waste from fossil fuels go? That has not been solved yet either ... In the last three years we have seen the political debate move. People are asking about the impact of global warming." He feels the public is beginning to realise that "every energy option has an environmental price".
He is not trying to flog a rosy picture of nuclear power's future - the City would not buy it - so much as a healthy future for BNFL. "If there is a nuclear renaissance we would be ready to take advantage of it," he says. "But we haven't built our business strategy on that." BNFL takes stagnation,
and even contraction, as its starting point.
BNFL will try to sell itself as a very different company from the one Mr Taylor took over. When he arrived in 1996, panicked BNFL staff were seeking diversification. Mr Taylor calmed everyone and persuaded his management team that the company should remain focused on what it knew - the nuclear industry - but broaden its service base, and go global.
First it reluctantly took on power generation, through the Magnox reactors, and set about extending the stations' lives. A better deal was struck last year when BNFL acquired Westinghouse, the American nuclear company, with a global reputation. With so few new reactors being built, governments are trying to extend the lives of some 400 world-wide. Westinghouse designed and built many of them. BNFL sees that as opportunity knocks.
The company seems to operate on the principle that whatever politicians promise at elections, they have to face reality. That means trying to meet international targets for CO2 emission reductions, and accepting that renewable energy cannot compensate for fossil, or nuclear, fuels.
Nuclear may be a mucky, dangerous, discredited business, but it will not be exiting quietly. "Sweden wanted to phase out nuclear power 10 years ago," says Mr Taylor. "But it employed Westinghouse to build a $100m control room for a reactor." Mr Taylor even manages to make the arrival of the Magnox "millstones" seem like unadulterated commercial serendipity.
Eight of the Magnoxes continue to operate - some with their lives extended - and provide 25 per cent of the company's revenue. Three are being decommissioned. Both proces- ses, he says, are developing expertise which can be sold to other countries.
He will not concede that the writing is on the wall for waste reprocessing, which account for 25 per cent of revenue. He emphasises that clean-up and decommissioning - only 10 per cent of business - is what BNFL wants to grow.
The Westinghouse deal also opened the door to the multi-billion pound market for decommissioning American nuclear weapons. The former Soviet Union presents greater decommissioning and clean-up chances. Unfortunately, no-one is willing to pay for those.
Mr Taylor says the new BNFL will operate "from cradle to grave" - an unfortunate choice of terminology, given the industry. What he means is that he wants BNFL pitching at all stages of the nuclear energy process, from the provision of fuel to the decommissioning of old power stations.
He paints BNFL in a no-lose position. And a few analysts agree that, despite the difficulties, the flotation will work. They say the successful sale of British Energy undermined the prejudice against the nuclear sector. The chief problem they believe will be explaining BNFL's complex composition.
One investment banker admits the politics around nuclear energy is a big negative, and advises BNFL to emphasis the clean-up business. A Friends of the Earth spokesman Dr Patrick Green says: "There is nothing environmentally positive about reprocessing."
But he does approve of BNFL's move into clean-up. Dr Green believes that privatisation will expose the economic flaws in reprocessing and the Magnox reactors, making clean-up BNFL's only long-term business.
Mr Taylor knows how to pitch things. "We want to play our part in helping clean up the world," he says.Reuse content