Government unveils plans for BNG to be broken up and sold

Click to follow
The Independent Online

The Government has unveiled plans to sell parts of British Nuclear Group separately to maximise revenues for the taxpayer.

Earlier plans to sell BNG, the clean-up business that runs the Sellafield nuclear site, as a whole were revised after it emerged that potential buyers were looking to break up and sell on parts of the group at a premium.

Alistair Darling, the Trade and Industry Secretary, said yesterday: "... instead of single buyers for BNG, consortia were being formed for the bid, suggesting that a future split of BNG was likely with a risk that the non-Sellafield pieces might be sold on at a premium to the loss of the taxpayer."

Britain's Serco, Areva of France, and American engineering groups such as Washington Group, Bechtel and Fluor are all thought interested in BNG. The latter launched a £400m bid in August.

BNG, which is owned by British Nuclear Fuels, comprises four main businesses: management of the lucrative Sellafield clean-up contract; management of the old Magnox reactor sites; project services; and a 33 per cent stake in AWE, which manages the Aldermaston weapons site on behalf of the Ministry of Defence.

Mike Parker, BNFL's chief executive, said: "This was always going to be a highly complex challenge. British Nuclear Group is comprised of different businesses, all of which need their futures securing in very different ways."

The Nuclear Decommissioning Agency will now handle a sale, open to "full competition", for the five-year contract to manage Sellafield in Cumbria.

Under earlier plans, any new owner of BNG would have also landed the Sellafield contract thought to be worth about £1bn a year. The new plans could well see its value prove higher.

Mr Darling said: "I have concluded that there are real benefits to project services and the Magnox business in separating them from the process of choosing the right contractor for Sellafield.

"I also believe that the best way of securing the right contractor for Sellafield is to proceed with a separate competition with the full focus on what is best at that site."

BNFL and NDA recommended that BNG should keep the Sellafield contract until a new operator can be put in place in 2008. The sales of BNG's other business should be completed next year.

Last week, BNFL completed the sale of its American reactor-construction arm, Westinghouse, to the Japanese electronics giant Toshiba for $5.4bn (£2.9bn).