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Anger as nuclear sell-off is shelved
The government has performed a U-turn on plans to sell British Nuclear Group, which is in charge of cleaning up the UK's largest nuclear site at Sellafield, and will instead break the business up and sell it off piecemeal.
The decision to shelve for the time being the sale of the main part of BNG, which decommissions nuclear waste, and instead press ahead with an auction of smaller parts of its business was struck at a three-hour board meeting of British Nuclear Fuels yesterday.
The move astounded the nuclear industry and prompted a round of mud-slinging between the various parties involved. It also led to an outcry from Prospect, the union which represents 6,000 workers at BNFL, which wanted BNG to be sold as a going concern in order to maximise its chances to compete with other nuclear companies from around the world.
One source close to the nuclear industry said BNFL - which oversees BNG and has been charged by the Government with selling it - and the Nuclear Decommissioning Authority, the industry watchdog responsible for handing out decommissioning contracts at the UK's spent nuclear sites, were blaming each other for the failure to reach an agreement on the BNG sale. "It is a complete shambles. People at the top of BNFL are blaming the NDA and vice versa," one person said.
BNFL, which is owned by the Government and run by a board led by chief executive Mike Parker, will now press ahead with the sale of Project Services, a specialist nuclear consulting business, and the one-third stake BNG owns in AWE Management, which does work for the Ministry of Defence.
Industry analysts believe Project Services could be worth between £80m and £100m, against the £500m BNFL had hoped to make from selling BNG whole.
Sources said at the root of the delay was vying between the two US engineering giants, Bechtel and Fluor, which are seen as two of the strongest competitors to buy BNG. It is understood that several senior people within BNG are keen to see the business sold to Fluor, while some people at the NDA look favourably on Bechtel.
Both Fluor and Bechtel have employed political lobbying of firms with close links to the Labour government and Fluor financed a £7,000 trip for MP Jamie Reed, whose constituency includes Sellafield, to see its sites in the US earlier this year.
One of the issues being slugged out is BNFL's wish to get the highest price for BNG on the one hand, against the NDA's desire to see whoever is chosen is best-placed to carry on the decommissioning work at Sellafield.
At the moment, there is an agreement that whoever buys BNG will get a five-year dowry of decommissioning work at Sellafield. After that point, the contract will be open for full competition.
The NDA said in a statement: "The NDA wants to see a new contract in place at Sellafield as soon as possible in order to drive improvements in safe performance at our biggest site, and to enable competition to be introduced to the rest of our sites."
BNFL said its board had concluded "the best value for the Government would be delivered if Project Services and the AWE shareholding were sold separately from the nuclear decommissioning businesses".