Government says plans to sell BNG

LONDON (Reuters) - The government said on Thursday it planned to sell British Nuclear Group (BNG), the clean-up unit of state-owned British Nuclear Fuels (BNFL).

Secretary of State for Trade and Industry Alan Johnson said the sale process, which was suggested by BNFL, would coincide with a new five-year contract to clean up and operate the controversial Sellafield complex.

The government hopes the BNG sell-off can be closed by autumn 2007.

Analysts say the sale could attract bids of up to 1 billion pounds from U.S.-based companies such as Halliburton , the Washington Group , privately-owned Bechtel and Fluor .

Engineering and project management firm Amec has also been tipped as a potential buyer.

BNG’s main customer is the Nuclear Decommissioning Authority (NDA), set up last year as part of a government plan to clean up the country’s ageing nuclear facilities.

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The NDA, responsible for all civil, public-sector nuclear liabilities, is due to outline its strategy on Thursday. It is expected to say that the estimated clean-up bill has grown to near 60 billion pounds from around 50 billion previously.

"I firmly believe that a competitive sale is in BNFL’s best commercial interest and represents British Nuclear Group’s best chance of operating successfully in the commercial market," Johnson said.

"By bringing in external expertise more quickly, it also contributes to improved clean-up performance for the NDA and is therefore good for the tax-payer," he added.

Sellafield, which can reprocess around 5,000 tonnes of spent nuclear fuel per year -- around a third of annual world production -- has a poor public image.

Since a fire a half century ago that forced the closure of the Windscale I military reactor, scientists are still trying to work out how to dismantle the chimney-top filter that trapped the radioactive smoke and stopped a nuclear catastrophe.

Government probes in recent years have also found that safety records were falsified by staff.

Other than BNFL unit Westinghouse, which is already being sold, Nexia and a 33 percent stake in Urenco also may be sold under government plans to sell energy-related assets.

Urenco, which operates enrichment facilities in England, the Netherlands and Germany, is a consortium of BNFL, Dutch government-owned Ultra-Centrifuge Nederland and two German utilities -- E.ON AG and RWE AG .

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