Germans in pounds 1bn threat to Sellafield

THE FUTURE of British Nuclear Fuels, which the Government is considering for privatisation, is being thrown into doubt because Germany - one of its biggest clients - wants to pull out of contracts worth pounds 1bn.

The new German environment minister wants to cancel contracts for the plant at Sellafield, Cumbria, to reprocess 1,000 tonnes of spent fuel from its nuclear reactors. But the proposal has caused a diplomatic dispute between Britain and Germany. The British Government has insisted that Germany cannot end the contracts, which run until beyond 2004, without paying millions of pounds in compensation. It fears that if Germany is allowed to pull out without paying the penalties, other countries, such as Switzerland, may follow suit.

If Germany succeeds, it would be a blow to the reprocessing industry in Britain and could cost jobs in the Sellafield area.

Talks between BNFL and government representatives, and German officials and power companies have failed to reach agreement and are due to continue in the new year. They hinge on whether Germany must pay millions of pounds of penalties to break its contracts with Britain.

A spokesman for BNFL said: "The contracts we have with Germany are for reprocessing, not for anything else. They have very robust penalty clauses."

Germany is Sellafield's second largest overseas customer, after Japan. Most of the reprocessing contracts with Sellafield, which began in 1994, expire in 2004 although some continue to 2009. The loss of German contracts would cost pounds 1bn of BNFL's pounds 12bn business at the Thorp reprocessing plant.

BNFL's reprocessing contracts are with six German electricity companies but because of the safety implications of nuclear power the contracts are underwritten by both governments. The British and German governments are involved in the talks because the contracts are underpinned by an "exchange of letters" making assurances about safety.

Germany's environment minister, Jurgen Trittin, believes that he can pass a law ending reprocessing without paying any money to BNFL. But Britain has insisted that Germany cannot pull out.

"BNFL's contracts will be one aspect of the discussions taking place between the UK and Germany governments at both industry and government level," a government spokesman said. "The discussions are ongoing, they are already taking place. Ministers have been kept informed on both sides."

BNFL is understood to have received the strong support of Tony Blair and Peter Mandelson, who until last month was Trade and Industry Secretary. Last week John Guinness, Chairman of British Nuclear Fuels, received a knighthood in the New Year's honours.

But other ministers, including John Prescott, Secretary of State for Environment, Transport and the Regions, and Michael Meacher, Environment minister, are thought to favour a compromise that would mean that Germany pays Britain the same amount of money to store the waste.

Some directors within BNFL believe the company should concentrate further on the "clean up" side of the business, including offering more "dry" storage of nuclear fuel for overseas customers. Dry storage is regarded as a safer option by many because it means that plutonium is not extracted to be stockpiled and does not lead to discharges into the environment.

Environmental groups say they would back such a shift in emphasis because it would also help Britain meet commitments to reduce nuclear discharges into the Irish Sea.

"The British should be grateful that the Germans are trying to get out of these contracts because it will help them meet the terms of the Ospar convention on marine pollution in the north-east Atlantic," said Pete Roche, a nuclear campaigner with Greenpeace. "John Prescott signed the convention. At the moment discharge from Sellafield goes by pipeline into the sea."

The German environment minister has hinted to German power companies that he might back a dry-storage option if Britain agrees. That would mean the reprocessed waste and extracted plutonium and uranium would not have to return to Germany, where transport of nuclear waste by rail through residential areas is increasingly controversial.

In November, the British government ordered a review of the safety of transporting spent nuclear fuel by train. That followed plans by BNFL to store nuclear trains in sidings in a London suburb. Germany has recently banned the shipment of nuclear waste out of the country by train because of fears over the safety of the flasks. Tons of spent fuel bound for Sellafield are sitting in Germany.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Training Officer

£30000 - £35000 per annum: Recruitment Genius: A Training Officer is required ...

Recruitment Genius: Technical Support Specialist - Document Management

£30000 - £40000 per annum: Recruitment Genius: A leading provider of document ...

Recruitment Genius: Legal Secretary

£17000 - £17800 per annum: Recruitment Genius: This is an opportunity to work ...

Recruitment Genius: Ad Ops Manager - Up to £55K + great benefits

£45000 - £55000 per annum: Recruitment Genius: This company is a digital speci...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent