UK atomic agency boss plots £450m buyout

UK atomic agency boss plots £450m buyout

Dipesh Shah, the chief executive of the United Kingdom Atomic Energy Authority, is plotting a management buyout of the public company, which has been valued at £450m.

Shah is believed to have sounded out key members of staff and private equity backers for a bid. The UKAEA could also attract interest from trade buyers such as Bechtel of the US, Britain's Amec, or the multinational CH2M Hill. The UKAEA's future is expected to be scrutinised by Alistair Darling, the new Trade and Industry Secretary who replaced Alan Johnson in the Prime Minister's cabinet reshuffle on Friday.

The government has made no secret of the fact that the public company could be privatised or sold at some point. A buyout led by Shah would be designed to prevent a sale to a competitor; it is thought to be backed by senior executives, some of whom are said to be growing increasingly impatient with the lack of progress towards privatisation.

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The UKAEA has recently begun to play a wider role in the private sector, forming joint ventures with private companies to compete for nuclear decommissioning contracts, both at home and abroad: the market is estimated to be worth more than £300bn. At present the company has £5bn of decommissioning work in the UK, which involves clean-up contracts for nuclear plants, including Sellafield in Cumbria and Dounreay in Scotland.

UKAEA also operates the nuclear fusion project in Culham, Oxfordshire. A spokesman for the UKAEA said: 'Any change of ownership is entirely a matter for government, as the shareholder. We will need to consider options for the future in consultation with our staff and the shareholder ... all options are open.'

The state-owned body's alliance with Amec and CH2M Hill, the UK and US civil engineering groups, is the first of a number of such partnerships expected to be announced over the next few months as the task of cleaning up the UK nuclear industry's legacy is opened to competition. That market is estimated to be worth £56bn over the next 75 years, and will offer lucrative returns for participating companies.

The first contract - for the low-level waste facility at Drigg in Cumbria - will be put out to tender this year. By 2008, 13 of the 20 sites are due to be opened up to competitive tender. Market liberalisation is forcing stateowned companies to forge private-sector alliances to try to protect their existing contracts, as well as bid for decommissioning work in overseas markets such as eastern Europe and the former Soviet Union, where business is booming.

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