UK is losing out in nuclear contracts race

£70bn bidding process is 'rigged', claims union
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The Independent Online

Foreign companies are in pole position to scoop tens of billions of pounds in contracts to build new nuclear reactors and decommission old ones. The trade union Amicus has expressed concerns that UK firms will also miss out when Britain's state-owned nuclear companies are sold off later this year and the lucrative contracts are handed out.

Union officials have complained that the bidding process for £70bn of clean-up work is "rigged". They claim UK companies are at a disadvantage in comparison with US firms, since they face restrictions on operating in the US nuclear market. Similar restrictions do not apply to American companies in the UK.

The Health and Safety Executive (HSE) has admitted that, since late June, it has held four high-level informal discussions with six companies about licensing new reactor designs that could be built in the UK. Only one company - the privatised generator British Energy - was from the UK. The others were the German firms E.ON and RWE, French firms Areva and EDF, and US nuclear services group Westinghouse, whose takeover by the Japanese firm Toshiba is expected to be completed in the next few weeks.

The Government is gearing up to sell its last remaining nuclear assets ahead of a likely building programme of new nuclear reactors.

State-owned company BNFL is trying to sell its £2bn one-third stake in the uranium firm Urenco. The Independent on Sunday has learnt that Westinghouse has expressed a firm interest in buying this. BNFL needs approval from its Dutch and German co-shareholders for the sale and hopes that they will judge Westinghouse to be a suitable potential partner.

On 22 August, BNFL also plans to kick-start the sale of its nuclear clean-up and operating division, BNG, which is being handled by investment bank NM Rothschild. The date is billed as an "industry day" for those interested in acquiring the clean-up company. BNG, under its chief executive Lawrie Haynes, is attractive because it will hold the most valuable clean-up contract, for the sprawling Sellafield site in Cumbria.

Some UK companies have teamed up with US companies to bid for decommissioning work and for BNG. But unions and other UK companies are concerned that the Americans - including Fluor and Bechtel and CH2M Hill - will end up controlling the lion's share of the £70bn clean-up market.

Dougie Rooney, Amicus's national officer for energy, said: "There is a sham going on. The way it's been handled, it's a stitch-up. It won't benefit British industry." He said that if UK companies ended up with only minor clean-up contracts, their ability to compete in the global market would be vastly reduced.

The British firms Amec and UKAEA have joined with the American company CH2M Hill to form a clean-up consortium. Gerry McGill, managing director of Amec Nuclear, said: "It would be a blow to the UK economy if only foreign companies won the biggest decommissioning contracts. But the challenge for the UK is also to develop the already strong [skills] base to enable UK companies to compete in ... a massive global market."

It has also emerged that the chief executive of BNFL, Mike Parker, could scoop a bonus of close to £1m when the group's stake in Urenco and its BNG business are sold.

A spokesman for the HSE stressed that discussions with the six companies were at an early stage and that no specific designs were on the table.