Enlarge imageBy David Cullen
LONDON (Reuters) - The government said on Thursday it aimed to sell state-owned nuclear clean-up company British Nuclear Group (BNG) by autumn next year, as officials released a higher cost estimate for clearing up the country’s nuclear plants.
The government’s Nuclear Decommissioning Authority (NDA) said the cost of cleaning up ageing nuclear power sites could be around 70 billion pounds, 14 billion pounds more than previously estimated.
Secretary of State for Trade and Industry Alan Johnson said the sale of BNG would come with a new 5 billion-pound five-year contract to clean-up and operate the controversial Sellafield complex.
BNG’s current parent, state-owned British Nuclear Fuels Ltd (BNFL), had suggested the sale.
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Government officials said the Sellafield contract would be awarded to BNG’s new owner.
Analysts say the BNG sale could attract bids in excess of 1
billion pounds from U.S.-based companies such as Halliburton
Engineering and project management firm Amec
The 1 billion-pound price tag does not include the value of the five-year Sellafield deal, and BNG will continue to operate the 11 Magnox atomic power plants, some of which are close to the end of their life span, for the next few years.
JOHNSON SEES BETTER PERFORMANCE
BNG’s main customer is the NDA, set up last year as part of a government plan to clean up the country’s old nuclear facilities.
"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 taxpayer," he added.
Sellafield can reprocess around 5,000 tonnes of spent nuclear fuel a year, around a third of annual world production, but has suffered from a poor public image.
Since a fire half a 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.
BNG Chief Executive Lawrie Haynes said the sale was a positive, strategic move for the business and its 800 staff.
"A strong British Nuclear Group means strong competition, and that can only be good news for the NDA and the UK taxpayer," Haynes said.
The NDA plans to introduce competition for clean-up contracts in an effort to get work done more quickly and efficiently.
NDA chairman Anthony Cleaver said the estimate of the overall cost of the nuclear clean-up had been raised to take account of factors such as inflation and to remove assumptions about efficiency savings, which the NDA believed were likely but not guaranteed.
"We feel a lot more confident (about the cost) than we did," he said. "But I would be foolish, I think, if I said categorically ... we couldn’t discover anything that could increase those figures."
But environmentalists were outraged.
"UK taxpayers will have to pay the spiralling bill of dealing with Britain’s dangerous nuclear legacy ... and we still don’t know how to safeguard it for the future," Friends of the Earth director Tony Juniper said in a statement.
Other than BNFL unit Westinghouse, which is already being sold, Nexia and a 33 percent stake in Urenco could also be sold under government plans to sell energy-related assets.
Urenco Ltd., which operates enrichment facilities in
England, the Netherlands and Germany, is a consortium of BNFL,
Dutch government-owned Ultra-Centrifuge Nederland and German
utilities E.ON AG
The government hopes the BNG sell-off can be closed by autumn 2007.
(Additional reporting by Madeline Chambers and Andrew Gray)
