£100m nuclear waste project for Dounreay

The Government is this week expected to kickstart one of the country's largest nuclear decommissioning projects by issuing a £100m contract at the controversial Dounreay power station.

The UK Atomic Energy Authority, which owns the site in northern Scotland, will name a consortium of construction companies to build a giant ground-level waste management facility. When the project is completed in 2008, it will store liquid nuclear waste currently housed in a 213ft deep shaft built in the 1950s.

The ageing facility has been blamed for a series of nuclear leaks over the past 30 years. It will take 10 to 15 years to empty and transfer the waste to the new steel storage tanks, where it will be mixed with concrete and left for up to 100 years. Companies such as Skanska and Alfred McAlpine are thought to be in the frame to carry out the work.

The Atomic Energy Authority estimates that decommissioning and environmental restoration of the site will cost around £4bn.

Dounreay pioneered the fast reactor in the UK. But its problems began in 1977 when a chemical explosion scattered radioactive material around the site. Seven years later, radioactive material was found for the first time on a nearby beach. In 1999 a Government study found that uranium had seeped though the plant's foundations, and in the same year the site was evacuated after a blaze. In 2000 and 2002 workers were exposed to nuclear waste material.

Despite this catalogue of problems the facility is rated 8 out of 10 for safety by the authority, based on an international rating system. The Atomic Energy Authority also has responsibility for Windscale in Cumbria, Culham and Harwell, both in Oxfordshire, and Winfrith in Dorset.

The authority's nuclear liabilities will pass in April 2005 to the new Nuclear Decommissioning Authority, the £40bn body being set up by the Department of Trade and Industry.