A potential stumbling block for the Government's hopes of privatising the nuclear power industry has been overcome after the Nuclear Installations Inspectorate said it could complete its vetting of the companies to be sold off within 12 to 14 months.
The inspectorate said the process could be completed without affecting safety even though inspectors would have to be taken off their duties at operating nuclear power stations in order to scrutinise the new companies. It dismissed fears that the sell-off, expected to be announced this week, might be derailed by a challenge from opponents on safety grounds.
Safety is a big issue in the planned privatisation and prospective buyers will have little chance of quickly cutting costs by rationalising the technical staffs and functions of the existing companies, because the NII, part of the Health and Safety Executive, will not permit reductions in the technical workforce on safety grounds.
"It is difficult to see how there can be job losses on the technical side," Chris Wilby, HM Deputy Chief Inspector, said. There is some synergy between the companies in the long term, he said, but the NII would not permit any precipitate change.
All Britain's advanced gas-cooled reactors and the sole pressurised water reactor at Sizewell B will be owned by a holding company based in Scotland, but this will not be permitted to operate the reactors it owns. Nuclear site licences, which authorise operations, will instead be granted to two subsidiary companies, roughly based on Scottish Nuclear and most of Nuclear Electric.
The holding company's commercial freedom to manage its subsidiaries will be heavily constrained by the inspectorate. Before the new companies can start operations, the NII will have to be satisfied that no instructions or memoranda from the holding company could inhibit safe operation of the nuclear plants. The company will also have to make a promise of non- interference in the day-to-day business of its subsidiaries.
The inspectorate is happy with the safety implications of the proposed structure for the privatised industry, which has been widely leaked in advance of a White Paper expected today. Mr Wilby said: "I can think of no area of concern which has not been addressed comprehensively by Government. Safety has to be paramount and they have had to listen to what we had to say."
It has emerged that the NII would have been unhappy if Scottish Nuclear, which operates two nuclear power stations north of the border, had been privatised separately and in competition to its larger English counterpart, Nuclear Electric. The inspectorate believes that Scottish Nuclear needed access to the safety research and development work done by Nuclear Electric and that this might not have been forthcoming had the two companies been set up in competition with each other.