BNFL and Amec in talks to create British nuclear clean-up giant

British Nuclear Fuels and construction group Amec are in talks to form a new company to bid for a slice of the £50bn of work to clean up Britain's nuclear legacy.

The pair have been in discussions for several months, and a formal agreement would potentially safeguard the future of the loss-making BNFL.

The new company would bid for work with the Nuclear Decommissioning Authority (NDA), the powerful new government agency that will issue contracts for the clean up work from April 2005.

Neither BNFL nor Amec would comment on the talks. But Lawrie Haynes, chief executive of BNFL's Government Services Group, said: "In the interests of securing real value for money for the NDA we will be talking to potential partners to explore ... opportunities to combine skills and expertise."

Amec is already working with BNFL on a number of projects to clean up radioactive waste at Sellafield. A source close to the talks said that BNFL would bring its nuclear know-how to the joint venture and Amec its commercial nous.

The NDA will have an annual budget of up to £2bn. BNFL and the UK Atomic Energy Authority will be automatically awarded the first tranche of contracts. Private companies will then be invited to bid for the work. Bechtel, the US construction group, is advising the Department of Trade and Industry on the formation of the NDA. Because it has access to commercially sensitive information, Bechtel will be barred from bidding for any NDA contracts until June 2006. Legislation to create the NDA is contained in the Energy Bill.

However, BNFL is worried that the San Francisco-based company could threaten its position as the UK's specialist in civil nuclear liabilities when it is allowed to bid. One source said the spectre of Bechtel was the main reason BNFL was talking to Amec.

Meanwhile, the Government is close to appointing Gordon Campbell, chairman of Babcock International, as the new chairman of BNFL.