Amec selected for multibillion Sellafield project

Sarah Arnott
Saturday 12 July 2008 00:00

The Nuclear Decommissioning Authority chose a consortium including the UK engineer Amec, the US giant Washington International and Areva of France yesterday as the preferred bidder for the multibillion-pound contract to manage the Sellafield nuclear power complex.

The deal, which is not expected to be finalised until October, is worth £1.3bn per year and is a major step towards the part-privatisation of the UK nuclear industry. It is the first contract devolving the management of state-owned nuclear assets to the private sector, following plans enshrined in the 2004 Energy Act to divide the ownership and operations of the UK's 19 nuclear sites.

Stephen Henwood, the chairman of the NDA, said: "This competition involves one of, if not the, most significant public sector procurements for UK Plc. The importance of achieving world-class performance throughout the Sellafield sites cannot be underestimated."

The contract, expected to generate profits of £50m per year, will be reviewed after an initial period of five years, with an option to renew for a total of 17 years. The Nuclear Management Partners (NMP) consortium is truly international: Washington is a division of URS Corporation, the US engineering and construction giant; Amec is a UK-listed energy services group; and Areva, a global nuclear power company, is French.

The news saw shares in Amec buck the falling market to end up 6.5p at 867.5p. Shares in Serco, a member of the rival SBB Nuclear consortium, fell 30p to 384p.

The contract covers Sellafield's reprocessing and waste storage facilities, former power stations at Calder Hall and Windscale, as well as the Capenhurst nuclear site and an engineering design centre in Cheshire. It is one of the most complex nuclear sites in the world, accounting for 60 per cent of UK nuclear waste, and is enrolled in a £40bn decommissioning programme that will run until 2120.

Under the deal, ownership of the shares of Sellafield Limited will transfer to NMP. Sellafield Limited was created in 2004 to manage day-to-day operations while ownership of the assets was assigned to the NDA, a government agency.

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