The privatisation of British Nuclear Group, the state-owned company which runs the Sellafield nuclear waste reprocessing plant in Cumbria, has been delayed until the end of the year.
The sale, which is expected to raise £200m-£300m, had been due for completion by the middle of the year. But it has been held up while ministers decide on the length of the dowry BNG should have to continue operating the Sellafield complex.
News of the hold-up came as British Nuclear Fuels, the parent company of BNG, formally completed the sale of its US subsidiary, Westinghouse, to Toshiba of Japan for $5.4bn (£3.1bn). This is $400m more than the nuclear reactor designer had been expected to fetch and more than four times the price BNFL had paid for it in 1999.
The Nuclear Decommissioning Authority, the new government body set up to take charge of the UK's £56bn of civil nuclear liabilities, proposed in its draft strategy last August that the operation of Sellafield be put out to competition from 2009.
This would affect the income of BNG and the amount BNFL could raise in any trade sale. A spokesman for the NDA said the Government was due to decide on its draft strategy by the end of next month and publish it some time in April.
BNG is thought most likely to be sold to an American bidder with the Washington Group, the engineering conglomerate Fluor and Bechtel all cited as potential buyers.
The clean-up of Sellafield is by far the biggest element of the NDA's workload and is expected to cost £30bn-£40bn. Under present plans, reprocessing of spent fuel would cease in 2011 and fuel fabrication would end in 2016, allowing the clean-up to start. It would take until the middle of the next century to complete.
The sale of Westinghouse and BNG will leave BNFL with just its research arm, Nexia, and a one-third stake in the uranium enrichment joint-venture, Urenco.
The stake in Urenco is potentially worth billions of pounds but it is a highly sensitive business, as the furore over Iran's nuclear plans demonstrates.
In London to sign the agreement to buy Westinghouse, the chief executive of Toshiba, Atsutoshi Nishida, forecast that the global market for nuclear power generation would grow by 50 per cent by 2020. Toshiba plans to sell down 49 per cent of Westinghouse to other Japanese and US investors.
Nothwithstanding the high price it had paid, Mr Nishida said that in the long term, Toshiba would do better out of the deal than the UK taxpayer.Reuse content