The proposed sale of BNFL's fuel manufacturing business to British Energy could make it impossible to privatise the state-owned nuclear company, the Independent on Sunday has learned.
The privatisation of BNFL was due next year but safety breaches and poor financial results have meant the plans have been delayed.
British Energy, the main private UK company with a nuclear business, is understood to have approached the Government about buying the fuel manufacturing and nuclear reactor design division. It was the only BNFL division to bring in a healthy profit last year.
Sources say the sale would effectively end any privat- isation plans. But the potential £1.5bn price tag on the division could tempt the Government to give in and take the money. BNFL is in talks with the Government over a major restructuring that will prepare it for a public-private partnership (PPP), where part of the business would be sold to private investors.
It could include hiving off the ageing UK nuclear power stations, which have £16bn worth of liabilities attached to them. Both BNFL and the Government are staying tight-lipped on the discussions.
The division that has interested British Energy made £52m pre-tax profits last year, but the other BNFL divisions were less successful. The nuclear processing division made just £3m, excluding exceptional items.
Losses of £199m and £66m came from the power station division and nuclear clean-up division, excluding exceptional items. This is because the largest station, Wylfa, and other reprocessing plants were dormant for much of the year but still had substantial costs. Overall, the company made a £66m pre-tax loss and then only after exceptional gains based on loans to the nuclear waste processor Nirex.
The Government might be tempted to sell the division because privatisation could generate negative publicity. The nuclear industry has a bad image after accidents at Three Mile Island and Chernobyl. Environmental groups would be likely to oppose the move.
BNFL was heavily criticised two years ago when it was found that a nuclear fuel shipment to Japan had breached safety rules, after workers had falsified data records. The safety issues would be highlighted through any privatisation move, because the chaos caused by rail privatisation remains a strong image in people's minds.Reuse content