Taxpayers `face cost of BNFL sell-off'

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The Independent Online
TAXPAYERS COULD be left with a bill of more than pounds 30bn if the Government presses ahead with plans to privatise British Nuclear Fuels, according to environmental campaigners.

The disclosure by The Independent yesterday that privatisation is under consid- eration was also attacked by trade unions. They said jobs would be at risk and safety standards compromised at BNFL's Sellafield reprocessing plant in Cumbria if it was sold off.

Peter Mandelson, Trade and Industry Secretary, appointed KPMG last week to advise him on the options for BNFL. The accountants are due to report before Christmas.

It emerged yesterday that KPMG was appointed at the insistence of the Chancellor, Gordon Brown. A Department of Trade and Industry spokesman attempted to play down the significance of the move saying: "The Government has no proposals and no plans to privatise BNFL. All we are doing, at the request of the Treasury, is to consider options for the future of the company."

However, one of the options that KPMG puts to ministers could be a sell- off. Patrick Green, Friends of the Earth's senior energy campaigner, said: "No financial investor with a grain of sense would invest in BNFL's reprocessing business with all its liabilities.

"The City would drop it like a red-hot radioactive brick unless all the liabilities are underwritten."

Research carried out by the Science Policy Research Unit at Sussex University last year estimated that Britain's total liabilities from civil nuclear operations at pounds 70.5bn.

Of this pounds 38.6bn was accounted for by BNFL and the Magnox Electric power stations over which it took control of last December.

The SPRU report says only pounds 3.7bn of BNFL's total exposure is funded as a result of a deal the company did with the Government to transfer decommissioning liabilities when it took over Magnox Electric.

Sellafield, which has pounds 18bn of reprocessing contracts from the UK, Germany and Japan, made profits of pounds 199m last year and returned pounds 53m in dividends to the Treasury.

When spent fuel arrives at Sellafield it is separated into uranium, plutonium, and low, intermediate and high-level waste.

Friends of the Earth argues that the economics of the plant were dealt a fatal blow after the failure of BNFL and Nirex to get approval to build an underground facility to dispose of intermediate-level waste.

Mr Green said the options were either to build expensive above ground storage facilities, send the waste back to BNFL's customers or stop reprocessing and become a waste management company.

"What we are looking at is a reprocessing business which is not viable," he added.

So far none of the plutonium and uranium building up at Sellafield has been recycled.

BNFL has built a pilot Mixed Oxide Fuel plant, which blends plutonium and uranium into a fuel that could then be recycled in nuclear stations.

It has not gained approval, however, from the Environment Agency to start commercial operations.

Meanwhile, unions warned that safety could be undermined if BNFL was run purely for profit.

Richard O'Brien of the MSF union, said: "We would be opposed to privatisation because this is a very sensitive industry and safety is paramount. There would be a problem of trust if BNFL was sold."