Sellafield subsidy 'could reach pounds 1bn'

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THE taxpayer could end up paying a pounds 1bn subsidy to British Nuclear Fuel's new reprocessing plant at Sellafield, according to a study by an academic at Princeton University.

The report on the economics and potential liabilities of the Thermal Oxide Reprocessing Plant (Thorp) was commissioned by the environmental group Greenpeace, but written by Frans Berkhout, an independent expert at the US university's centre for energy and environmental studies.

Last September, the Treasury invited Greenpeace to present an earlier version of the report, a move which sparked 'inter-departmental discussions' headed by the Cabinet Office.

Thorp, given the go-ahead by the 1977 Windscale Inquiry, was completed last year at a cost in excess of pounds 1.85bn. It awaits permission from the Government to load radioactive spent nuclear fuel. BNFL maintains that it will make a profit of pounds 500m over the first 10 years even after putting aside money for knocking it down at the end of its lifetime.

Dr Berkhout believes that the decommissioning costs are so high - and BNFL's track record of accounting for such costs so poor - that it would be politically less risky to abandon the plant now.

BNFL estimates the costs of demolishing the plant at pounds 900m. Dr Berkhout points out that a much smaller, pilot reprocessing plant in Germany will cost nearly pounds 600m to decommission.

In addition, BNFL assumes that it can postpone most of the decommissioning until at least 50 years after the plant closes. Dr Berkhout disputes this. He also rejects BNFL's claim that it has cast-iron contracts with its customers. 'There is a real chance that operating Thorp could lead to financial losses and a consequent drain on public finance.'

A spokesman for BNFL said: 'We believe Thorp is an economic success . . . This report merely rehashes old arguments which we refuted two years ago.'

BNFL is conducting an inquiry into how a litre of solvent containing about a gram of plutonium came to be splashed on to a floor at Sellafield last Tuesday. No one was contaminated.