US group 'will slash UK nuclear clean-up costs'

America's leading nuclear clean-up company has said it could cut the £70bn cost of decommissioning Britain's civil nuclear sites by as much as a quarter.

Washington Group, which controls about a third of the US nuclear clean-up market, also said it would consider bringing American nuclear waste into the UK for reprocessing if it succeeds in buying British Nuclear Group, the state-owned company with contracts to operate nuclear sites in the UK including the giant Sellafield fuel reprocessing plant in Cumbria.

The Government aims to privatise BNG, part of British Nuclear Fuels, by the end of next year. Bidders will be selected this autumn and invited to submit tenders next spring. Washington is likely to face stiff competition from a potential buyers including Bechtel and CH2M Hill of the US and Amec, the British engineering contractor.

The UK clean-up programme will involve 20 nuclear sites, of which Sellafield is by far the biggest, and is expected to generate revenues of £2bn a year.

Estimates of the likely proceeds from the BNG sale vary wildly, with figures ranging from £250m to more than £1bn. But Preston Rahe, the president of Washington Group's energy and environment division, said the deciding factor in selecting a bidder would be the cost savings it could achieve rather than the price being offered.

Washington has the clean-up contract for the Savannah River site in South Carolina - a very similar facility to Sellafield - and claims to have cut the cost to the US government by $16bn (£9bn) or 25 per cent and shortened the time it will take to decommission the plant by 23 years.

Mr Rahe said savings of a similar magnitude could be achieved in the UK. Sceptics claim the huge cost savings in the US have come partly through reducing the scope of the clean-up programmes. But Washington insists it has achieved the improvements through greater operating efficiency and better use of facilities. For instance, it says it has saved the US taxpayer $450m by turning an old reactor at Savannah River into a plutonium storage site rather than building a new store.

Mr Rahe said if Washington succeeded in buying BNG, it would reopen the Thorp reprocessing plant at Sellafield, which has been closed since last year after a radioactive leak. It would also continue commercial production at Sellafield's Mox plant, which makes mixed oxide fuel for civil reactors using plutonium and uranium from reprocessed nuclear waste.

US legislation introduced during the Carter administration prevents the export of US nuclear waste on grounds that it could encourage nuclear proliferation. But these restrictions are expected to be relaxed, and Mr Rahe said it would be "an interesting and creative" idea to ship waste to the UK for reprocessing.