Serco brings in Bechtel for £70bn nuclear bid

Services group Serco has teamed up with US construction giant Bechtel to bid for a slice of the £70bn UK nuclear decommissioning market. The move could lead to an offer for British Nuclear Group (BNG).

Confirmation of Bechtel's involvement in the consortium will be controversial. The US company helped set up the Nuclear Decommissioning Authority, the state-run body that will set the terms of BNG's sale and start handing out decommissioning contracts this autumn.

The Government originally barred Bechtel from bidding for contracts until 2008 to avoid any conflict of interest. But the ban was lifted earlier this year, which has angered rival companies wanting a share in the market.

Companies see securing decommissioning 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, which has exchanged confidentiality agreements with the US company, is expected to announce its consortium within weeks. The company already has expertise in the nuclear field through its stake in the AWE joint venture that runs the UK's Trident nuclear programme. It is responsible for assessing the safety of nuclear submarines when they leave port and is also involved in civil decommissioning work in Russia.

Bechtel wants Serco to lead the consortium because of its government links and knowledge of the UK nuclear industry.

All UK nuclear sites are being decommissioned before a new tranche is built. BNG operates a number of these, including Sellafield, and is involved in decommissioning. In the autumn it will be given a five-year contract to clean up Sellafield, worth £5bn, which BNG's buyer will inherit. Bechtel is known to be interested in purchasing the company.

The US company CH2M Hill, which also wants to buy BNG, has already formed a rival decommissioning consortium.