Babcock to demand more state money for nuclear clean-up

Exclusive: Union leaders and senior industry figures claim the taxpayer is going to be 'fleeced'

A Babcock International-led consortium is set to demand hundreds of millions in extra taxpayer money to decontaminate 12 historic nuclear sites, despite only getting starting on the £4.2bn contract six months ago.

Union leaders and senior industry figures claim the taxpayer is going to be “fleeced” and argue the problem is another example that bid processes for major nuclear work are not being run properly.

Babcock’s nuclear arm, Cavendish, and Fluor, a Texas-based engineering group, were awarded the hotly contested deal to decommission 12 sites, 10 of which are home to near-obsolete Magnox reactors, last year.

Cavendish Fluor Partnership (CFP) been given control of two companies, Magnox Limited and Research Sites Restoration Limited, and were expected to use their private sector acumen to save the UK £1.5bn over 14 years.

But, having now assessed most of the sites, which stretch from Hunterson A on the Ayrshire coast down to Dungeness A in Kent, it is thought that around half a dozen were not as advanced in their decommissioning as the consortium had expected. CFP was given a year to redraft its business plan in case of revisions to the scope of its work and will submit these changes to the Nuclear Decommissioning Authority (NDA) this summer.

In a recent newsletter to staff, Magnox said a revised plan for year one would be ready by April and the remainder of the contract would then be “updated progressively”.

It added the reassessment was “a complex task taking a significant effort”, while managers are said to have openly discussed the need for extra money in presentations and meetings. An extension to generating electricity from Wylfa in Anglesey, which is the world’s last operating Magnox reactor, and delays to programmes at Bradwell, Essex, and Trawsfynydd, North-west Wales, are among the issues that have added to the costs.

The news follows a litany of problems at Sellafield, the nuclear facility in Cumbria that has seen estimates of its incredibly complicated decontamination hit £80bn. The private sector consortium on that project, which included British engineer Amec, was recently stripped of its contract due to NDA and ministerial frustration over its work.

An industry source said: “The Magnox problems are absolutely disgusting. The taxpayer is going to get absolutely fleeced again.”

Kevin Coyne, national officer for energy and utilities at Unite the Union, said: “Cavendish Fluor said to us that there are definitely costs that have been unforeseen in the original bidding process. It seems to us that the whole bidding process is awry at the moment.”

Energy Solutions previously managed the Magnox sites and was furious at losing out on continuing its work when Cavendish Fluor Partnership (CFP) was made preferred bidder last March. The Utah-based group filed a High Court writ in the summer arguing that the UK’s procurement rules had been flouted, a claim the NDA denies.

A Magnox spokeswoman said: “We are currently in the consolidation phase of the contract which includes determining the status of the sites.”

An NDA spokesman said: “As part of the contract won by CFP, a period of consolidation and reconciliation was built into the process for the winning bidder to consider the financial bid they made in 2013 and to test that against the situation they actually inherited in September 2014.

“The new plan emerging from that process is not due to be presented to the NDA until later this year, but we remain confident that the final plan agreed with CFP at that time will see substantial savings and represent excellent value for money to the taxpayer.”