Ultimate cost of Sellafield clean-up 'cannot be forecast'

The current estimate for decontaminating the Cumbrian site of £88bn to £218bn illustrates the 'level of uncertainty'

Mark Leftly
Thursday 12 March 2015 02:19 GMT
The over-budget decontamination of Sellafield by the NMP consortium has been the subject of repeated criticism
The over-budget decontamination of Sellafield by the NMP consortium has been the subject of repeated criticism

The top official at the Energy Department has admitted to not having “general confidence” that the escalating cost of cleaning up the Sellafield nuclear facility can be accurately forecast any time soon.

Stephen Lovegrove, the Department’s Permanent Secretary, told The Independent that the huge range in the current estimate for decontaminating the Cumbrian site – £88bn to £218bn – illustrated the “level of uncertainty” in the forecasts.

Mr Lovegrove was speaking after a hearing of the Public Accounts Committee yesterday afternoon. He told MPs that it was “impossible to know” the costs of the detoxification of one of the world’s most hazardous nuclear sites, a job that will not be completed until well into the 22nd century.

“We still do not know by any stretch of the imagination all the technical challenges of the site,” Mr Lovegrove said. “The difficulties are pretty much unprecedented.”

Dame Ann McGuire, a former Labour minister who sits on the committee, said: “We know we have to be very aware of the safety issues … but the taxpayer needs some reassurance that this isn’t just going to be a blank cheque” for the private sector.

Mr Lovegrove and John Clarke, the chief executive of the Nuclear Decommissioning Authority, appeared before the committee yesterday after Nuclear Management Partners (NMP), the private sector consortium overseeing the clean-up, was in effect sacked in January. Mr Clarke agreed with Mr Lovegrove, saying experts “can’t yet even start to scope” projects not due to start for many years – meaning that costs are likely to increase as problems are found.

NMP – comprising the US engineer Aecom, the FTSE 250 group Amec, and France’s Areva – had only been handed a five-year extension to its deal in late 2013. NMP in effect manages the site licensee company, Sellafield Ltd, in what has been criticised as an overly complicated business model.

The extension surprised many industry insiders, as NMP had struggled to control costs and meet schedules on a complicated site where thousands of staff work in more than 250 buildings in a two square mile area. Welders from London Underground are regularly sent to Cumbria to help show Sellafield workers how to operate in tight spaces.

NMP was stripped of its deal in January, but is expected to hand management responsibilities back to the NDA over the next 12 months. At that point, a new business model involving the private sector will be introduced.

MPs wanted to know why the NDA had not simply terminated the consortium’s deal when its contract came up for renewal in late 2013. Mr Clarke said that he did not have a “proper analysis” at the time on whether alternative options for running Sellafield would be workable.

The PAC’s chair Margaret Hodge said: “Clearly that work ought to have been before [the contract extension] … it’s a bit crazy. You should never have got into extending it. This feels to me like a revolving-door world – that some people will pop up in new companies [that work on Sellafield].”

Mr Clarke insisted that NMP had not failed in its contract, rather that the way the deal was structured was wrong. At the end of last year, Mr Clarke wrote to Mr Lovegrove and warned that sticking with NMP “potentially poses significant risks to NDA’s and DECC’s [Department for Energy and Climate Change] credibility should we continue with the current model, despite the growing evidence it does not represent best value for money”.

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