Serco and Bechtel join forces to bid for Sellafield clean-up

Serco, the UK project services specialist, will tomorrow announce it has formed a nuclear clean-up consortium with US engineering giant Bechtel and the US nuclear specialist BWXT.

The consortium's first priority will be to bid for the five-year contract to clean up the sprawling Sellafield nuclear site in Cumbria. This will be worth around £5bn initially but could include an option to extend the deal. Under plans agreed by the Government last month, companies will be invited to bid for the contract next year. The award will be made in 2008.

The involvement of Bechtel in decommissioning will be controversial in some quarters of the nuclear industry. Last year the company helped set up the Nuclear Decommissioning Authority, the body which is running the competitions to parcel out the estimated £70bn of UK decommissioning work.

To prevent any conflict of interest, the Government barred Bechtel from bidding for any of the lucrative clean-up contracts until 2008. But earlier this year the ban was lifted, despite protests from rivals, such as Fluor, keen to win a large chunk of the market .

Bob McGuiness, chief executive of Serco Science, denied that Bechtel had any greater advantage, through its work with the NDA, than other firms already working on nuclear sites in the UK.

"I don't think there is a conflict," he said. "It's important that this whole process is open, honest and transparent."

As well as Sellafield, the UK's other ageing nuclear sites and power stations will need to be decommissioned in the coming years.

Companies see the clean-up work as a key to winning contracts to build and operate new reactors, as these will be located next to the stations that are being decommissioned.

Serco already has expertise in the nuclear field through its stake in the AWE joint venture that runs the UK's Trident nuclear programme. It also inspects the Royal Navy's nuclear submarine fleet and carries out civil decommissioning work in Russia.

Mr McGuiness said Serco's main contribution in the consortium would be to provide knowledge of doing business in the UK and contacts in the public sector.

"All the technology in the world will not work without a good understanding of the UK workforce, government and unions," he said. "That's what we do. Serco has transferred more people from government employment into the private sector by some way."