Nuclear giants team up to bid for UK reactor-building programme

Some of the world's leading nuclear companies are lining up UK partners to prepare bids for an £8bn reactor-building programme, which is expected to be announced after the election.

Some of the world's leading nuclear companies are lining up UK partners to prepare bids for an £8bn reactor-building programme, which is expected to be announced after the election.

The Government has signalled that it will publish a new energy White Paper which, controversially, is expected to propose the construction of new nuclear reactors to replace those now being taken out of service.

Leading nuclear and construction companies, including French nuclear giant Areva, UK construction company Amec and Westinghouse, the US arm of the state-owned BNFL, are already looking for potential partners ahead of any government move.

Talks are at a preliminary stage. But the rising levels of corporate activity indicate companies are eager to invest in the UK nuclear industry once the Government signals that nuclear is back on its agenda.

The news comes as the Nuclear Decommissioning Authority prepares to take over the UK Government's £48bn of nuclear liabilities - mostly belonging to loss-making BNFL - on 1 April. But a European Commission investigation means that BNFL's liabilities, including its ageing reactors and Sellafield reprocessing site, will remain on its balance sheet until Brussels has decided whether the NDA breaks state-aid rules.

The Government last reviewed energy policy two years ago, when it favoured renewable energy sources such as wind over nuclear. This is changing as fears grow of a looming energy shortage. Some environmentalists are also backing nuclear power because it does not emit carbon dioxide, which contributes to global warming.

The Government has indicated that it would put out to tender any contract to design, build, finance and operate a nuclear construction programme to competing consortia. Several companies would be needed to carry out the work. Westinghouse, which is close to Whitehall as it is part of BNFL, said that a successful consortium would have to include at least one UK-based company.

The winning consortium would be responsible for building as many as 10 reactors, at a cost of around £800m each.

A spokesman for Amec said: "We would be stupid if we were not making preparations. We are looking at who are the right people. It will probably be a consortium of three plus."

Amec has not yet held formal talks with other companies, but it is understood to be considering linking up with Westinghouse and US construction and engineering companies Bechtel and Kellogg Brown & Root, which is owned by Halliburton.

Areva designs and builds reactors, as well as providing services such as fuel manufacturing and reprocessing. Industry sources said that it was also keen to scoop a slice of any new nuclear action. A spokesman for Areva said: "If the UK government decides to build new reactors, Areva will offer our services to UK utilities."

A spokesman from the Department of Trade and Industry said: "In formal terms, our position hasn't changed from the Energy White Paper: At present, the economics don't stack up for new nuclear build. In addition, there are the problems of waste."