Revealed: £2bn cost of failed Sellafield plant

Internal review deals blow to the Government's hope of commissioning new mixed-oxide facility

A controversial nuclear fuel plant that was closed down two years ago left taxpayers with a £2.2bn bill instead of turning a healthy profit, an government report has admitted.

An internal report revealing the full extent of the failure of the SellafieldMixed-Oxide (MOX) plant concluded that the facility was "not fit for purpose" and its performance over a decade was "very poor".

The report is embarrassing for the Government which is proposing to build a new MOX plant at Sellafield to deal with Britain's civil plutonium stockpile – the biggest in the world.

Campaigners and MPs claimed yesterday that the report's account of the events at Sellafield fatally undermined the case for any further attempts to profit from the MOX process, which uses reprocessed plutonium to make fuel for civil nuclear power plants.

The Green Party's spokesman, Andrew Cooper, said: "They have described their report as 'Lessons learnt' but the reality is that this is a catalogue of inherent failure which brings into question the whole nuclear industry. Clearly there have been well-documented failures by officials but far from learning the lessons, it appears that the coalition and Labour are willing to give them the benefit of the doubt yet again."

The internal review, disclosed under freedom of information laws, reveals that instead of producing the predicted 120 tons of fuel a year to sell to foreign power companies, the Sellafield MOX plant (SMP) managed to yield a total of less than 14 tons in 10 years. When the plant was shut down in 2011 it had cost £1.4bn, compared to the £280m estimated when the plant was approved in 1993.

But the "Lessons Learned Review" warns that: "In addition to this, the future costs of cleaning out and decommissioning the plant are estimated at £0.8bn (in 2011 money values), giving an aggregate net total loss for the full plant lifecycle of around £2.2bn."

The plant was completed in 1997 but it did not begin work until 2001. The review revealed that the facility was hobbled from the start, after its operator British Nuclear Fuels Limited (BNFL) failed to secure MOX expertise from the German engineering giant Siemens. "When the Siemens acquisition was abandoned, BNFL proceeded with SMP nevertheless and relied on its relatively limited in-house expertise," the report declared. "As a result, SMP had very significant gaps both in its design and operating capability. "

The report concludes with a list of 12 lessons to be learned "if a decision is made to construct a new MOX plant in the UK", including demands for realistic costing and planning, robust governance and "not carrying on when issues arise until there is clarity on the cost implications and scale of the correction that is required".

The energy minister Charles Hendry shocked the anti-nuclear lobby in December with the announcement that the used plutonium in Sellafield should be converted into MOX fuel for possible use in a new generation of reactors.

The Labour MP Michael Meacher, who was environment minister when SMP was completed, said: "The history of the first MOX plant … makes this decision almost unbelievable. What hasn't been highlighted is what a rip-off the entire project was from the start," he said.

A spokeswoman for the Department of Energy & Climate Change said the causes of SMP's poor performance had been analysed "and used to inform future work."