Nuclear firms fined £4m for safety lapses that led to radioactive leaks

Two of Britain's leading nuclear companies were fined a total of £4m yesterday and given severe reprimands after safety lapses led to the release of radioactive material.

The Nuclear Decommissioning Authority (NDA) imposed penalties of £2m each on the state-owned British Nuclear Group (BNG) and United Kingdom Atomic Energy Authority (UKAEA) after separate incidents at the Sellafield and Dounreay waste reprocessing plants.

The fines are a serious blow to BNG and UKAEA, both of which are bidding for up to £70bn worth of nuclear decommissioning contracts which the NDA is due to award over the next five years.

The Government is preparing to privatise BNG next year in a move which is expected to raise £300m-£500m. There has also been speculation that UKAEA may be part-privatised.

BNG's Thorp spent fuel reprocessing facility at Sellafield is still closed after the leak of radioactive liquid in May 2005, involving enough material to half fill an Olympic-sized swimming pool. BNG was prosecuted separately over the incident by the Health and Safety Executive in June and is due to be fined in October.

At the UKAEA's Dounreay facility in Scotland last September, 266 litres of hazardous nuclear waste split on to a laboratory floor when it was being mixed with concrete and pumped into 500-litre drums for storage.

A spokesman for the NDA said: "We wanted to send out a strong signal that safety is our number one priority. We will not tolerate inadequate levels of performance such as this and we will not shrink from taking tough action. The NDA is not a pushover."

The penalties were disclosed in the NDA's annual review for 2005-06, which said the organisation had deducted £2m from the fees of each company "as a consequence of failings that led to incidents at Thorp and Dounreay". The review also reveals that Sellafield's controversial MOX fuel fabrication plant, which mixes uranium and plutonium from spent nuclear waste to make new reactor fuel, is not performing adequately, with only 2.92 tonnes of material processed so far against a target of 5.08 tonnes.

The NDA is due to begin inviting firms to tender for the first of several multibillion-pound nuclear contracts in October. The first contract will be to handle low-level waste from the 20 civil nuclear sites for which the NDA is responsible. BNG and UKAEA, which has teamed up with the engineer Amec to bid, will face stiff competition from overseas groupsincluding Washington and Bechtel of the US.

A spokeswoman for the UKAEA said the Dounreay incident had been unfortunate but stressed that no employees had been harmed. The NDA said that in the case of Sellafield, no release of radiation had occurred beyond the boundary of the site and no workers had been irradiated but it was nevertheless a serious lapse in management.