Should nuclear safety be sold?

The Government must not hurry privatisation, warns Tom Wilkie
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The Independent Online
Will John Major's government accomplish the privatisation which defeated even Margaret Thatcher - selling Britain's nuclear power stations into private hands? This morning, the Cabinet is expected to discuss whether and how the sale could be achieved.

If it goes ahead, privatisation could raise between £2bn and £3bn for a tax-cutting budget before the next election. An army of highly paid accountants and financiers will make a killing sorting out the formidable details of the sale, but it could yet be snagged by the bureaucratic fine print of nuclear safety.

If the safety regime is not crystal clear, then "regulatory risk" - the fear that new safety restrictions might suddenly be imposed on a company's operations - will affect the price for which the industry can be sold.

Privatisation will profoundly alter the way nuclear safety is policed. In the United States, where there are many small investor-owned nuclear utilities, the Nuclear Regulatory Commission is a huge bureaucratic organisation with a heavily prescriptive approach, setting out endless checklists for operators. The NRC has to think through what could go wrong and what preventive measures to take, because it cannot always rely upon those it regulates to have the technical resources to do so for themselves.

By contrast, Britain's Nuclear Installations Inspectorate is small, cheap and efficient, because the onus for maintaining safety has always been on the large, well-resourced, state-owned operators. The chief nuclear inspector's task is to tell the industry: "Convince me that what you propose to do is safe." The NII then acts as a critic, analysing and testing the "safety case" put to it by the operator. Safety is internalised into the utility's culture.

Will a private utility be as willing to shoulder the costs of this internal bureaucracy of safety as its state-owned predecessor? There will be a tension as never before between the need to make a profit and the demands of safety. The NII will inevitably be forced towards a more prescriptive American-style model.

The British system depends on respect for the regulator, rather as in the past the Wimbledon umpire was always right even when he was wrong. But will the imperative of paying dividends to shareholders transform the nuclear industry from the gentlemanly style of Ken Rosewall to the abrasive confrontational style of John McEnroe?

There are already worrying straws in the wind. Earlier this year, for the first time anyone can remember, one licensee argued back when prosecuted by the NII for breaches of safety regulations. Traditionally, the gentlemanly thing to do was to accept the blame while perhaps entering a plea in mitigation. Significantly, it was a privatised company, Amersham International, which this year broke that tradition, pleading not guilty to the charges (which related to the use of radiation sources, not to nuclear power generation). The company was convicted on all counts.

Later this year, Nuclear Electric will be in court over an incident at Wylfa nuclear power station in Wales. The company allegedly continued generating power knowing that a component was adrift and lodged in the reactor. Nuclear Electric denies the charges.

One need think only of Chernobyl to see that state ownership is no guarantee of safety. But the over-bureaucratic US system, where every ruling by the NRC is dragged endlessly through the courts, does not inspire confidence either. The NII's inspectors are well able to handle even the McEnroes of this world, but the change of culture they face is so great that it may take more than a year to get the middle way in place.

The Government has only about a year to privatise the industry. Regardless of the political pressure for speed, this job must not be hurried if we are to retain faith in the safety of nuclear power.