Atomic energy body to be privatised: Nuclear power station sales could follow. Donald Macintyre and Nicholas Schoon report

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The Independent Online
THE Atomic Energy Authority is to be privatised, in a move which could foreshadow the sale of most of Britain's nuclear power stations.

Ministers will announce their decision this week. A Bill to privatise the AEA, the state body responsible for civil nuclear research since the Fifties with a turnover of pounds 400m a year, is expected to be introduced in this Parliament.

With the future ownership of the Post Office uncertain, the AEA sale could be the main privatisation measure of the 1994-95 session to be included in the next Queen's Speech. It could also provide a model for the bigger privatisation of Nuclear Electric - by leaving the most awkward, hard-to-privatise radioactive liabilities within the public sector, while selling off the more attractive remainder.

The AEA owns six defunct research reactors and one in operation, stretching from Harwell in Oxfordshire to Dounreay in the north of Scotland. They will be radioactive for thousands of years and require careful decommissioning.

The Government is expected to leave these and other pieces of radioactive AEA plant, along with 1,000 staff concerned with decommissioning, in the public sector.

Britain's mainstream nuclear power stations had to be belatedly excluded from electricity privatisation in 1990 because of the huge liabilities arising from their decommissioning and nuclear fuel reprocessing costs. But Nuclear Electric, the state-owned power company which runs the stations in England and Wales, is now agitating to be privatised.

One option would be for the public-sector remnant of the AEA to take over the liabilities and decommissioning of Nuclear Electric's ageing Magnox reactors. These first-generation nuclear power stations are nearing the end of their lives or have already closed down. Nuclear Electric believes its own privatisation will be impossible unless they are taken off its hands, but its more modern reactors are saleable.

The AEA employs 8,000 people, compared with 14,000 six years ago. The number is expected to halve over the next few years, mainly due to nuclear research cutbacks.

Over the years the organisation has diversified heavily, selling its accumulated high-technology knowledge and skills to British industry and overseas governments and companies. It provides consultancy and research for customers ranging from aerospace to utilities and even health services.

It has particular strengths in monitoring and abating pollution and wastes, and is in the process of setting up a national environmental technology centre which should be a world leader. Placing this in the private sector will be strongly opposed by environmental groups and opposition parties.

The AEA says it has 'one of the strongest multi-disciplinary teams of scientists and engineers in Europe'. If the non-nuclear majority of the company was privatised, it would be one of the world's largest private-sector research and consultancy companies.

But the privatisation is likely to be difficult as well as controversial because the Government still provides more than half of the AEA's income. The AEA's management wants it to be privatised as a whole by a share flotation, keeping it as an independent enterprise. It believes there are grave drawbacks in selling the organisation piecemeal or selling the entire business to one private-sector company.