Nuclear stalemate plunges Sellafield auction 'into crisis'

Britain's £70bn decommissioning plans falter as BNFL goes back to the drawing board over sale of subsidiary
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Fears are growing that the Government's auction of BNG, the nuclear clean-up group, could be delayed by up to a year.

The board of BNG's parent company, BNFL, will hold a special meeting later this week to try to find a way forward.

The Government is selling off a number of state-owned assets and BNFL had planned to get the sale under way in the autumn. But it is understood that disagreements with the Nuclear Decommissioning Authority (NDA), the body set up to handle the UK's estimated £70bn clean-up job, are likely to delay the plans.

The proposed sale of BNG, which was confirmed by the Government in March, is complex. It is being run jointly by the NDA and BNFL but they have yet to agree on how to proceed. Both deny there is any disagreement.

The NDA is still drawing up a new five-year contract for BNG to continue to operate and decommission the huge Sellafield site in Cumbria. Whoever buys BNG will inherit the Sellafield contract, which currently generates most of BNG's profits.

Earlier this month, the NDA pencilled in an "industry day" on 22 August for those companies interested in buying the company to take a closer look. However, this was scrapped. Instead, the NDA is planning to start the sale by issuing a public procurement notice, an official document announcing that a government contract is being put out to tender.

BNFL and the Treasury also want to set a high price tag for BNG. But the NDA does not share their priorities. It could, for example, sell BNG for a token £1 if the company's new owner promises to make a smaller profit on the Sellafield contract. The alternative, preferred by BNFL, is to allow the new owner to recoup its large up-front outlay in buying BNG by making higher margins on the contract.

The Amicus union claimed the impasse had plunged the Government's plans to create a competitive market for decommissioning into crisis. It is also concerned that small UK companies will be put off from bidding for BNG as, in its current guise, it is too large and has a wide range of activities. The original plan was to sell BNG as a whole, but this could now change.

Dougie Rooney, Amicus national officer for energy, said: "We urge the Government to delay the sale of BNG while the process is re-evaluated."

A spokesman for BNFL said: "It's a complex business and obviously with such a complex set of issues we want to make sure we get it right. If the sale takes a bit longer so be it."

A statement from the NDA said: "A sale of BNG by competitive process, together with a new contract for our biggest and most important site, is a complex challenge on which the NDA has been focusing enormous effort since the end of March.

"We want a new contract in place at Sellafield as soon as possible, and the NDA is doing everything it can to make progress on the timetable to achieve this. We must ensure, however, that the competition process follows strict EU procurement rules."