Nuclear Management Partners loses Sellafield contract
The Department of Energy & Climate Change (DECC) has stripped Nuclear Management Partners (NMP) – the parent company of Sellafield Ltd – of its £9-billion waste contract to clean up the Sellafield nuclear site.
The announcement was made today (13 January), after increasing concerns over ‘complexities’ with the management’s clean-up operations, cost overruns and delays.
As such, the DECC announced today that it was approving the Nuclear Decommissioning Authority’s (NDA) recommendation to simplify the relationship between the NDA and Sellafield Ltd to ‘bring greater clarity and focus on achieving progress and value for money’ at the Cumbrian nuclear reprocessing site.
Under the new arrangements, Sellafield Ltd (the Site Licence Company, SLC) will continue to operate the site but will no longer be under the temporary ownership of a private sector contractor (a Parent Body Organisation, PBO). Instead, ownership will belong to the NDA, and the SLC will acquire a ‘strategic partner’ from the private sector to advise and assist on the work needed.
The NDA has said that the ‘ongoing safe operation of the Sellafield site and continuation of the change programmes within the business are paramount, and the NDA will continue to work closely with and support the Sellafield Ltd Managing Director and executive team throughout this process’.
NDA-appointed directors will soon be introduced to the Sellafield Ltd Board, to whom the executive team, which will continue to have day-to-day management responsibilities for the site, will report.
There will now be a period of ‘detailed engagement’ with workforce representatives, the supply chain, regulators and community to work through the transition period, which is expected to take around 15 months.
‘Safe and secure operation of the Sellafield site will remain the overriding focus’
Announcing the decision this morning, Ed Davey, Secretary of State for Energy and Climate Change, said: “Sellafield is the biggest and most complex nuclear site in Europe, so it’s right that we keep the way it’s being managed under constant review…. Our goal is to ensure that the nuclear legacy is made safe, decommissioned and cleaned up, and in a way that best delivers value for money.
“The current arrangements brought stability to the site from 2009, have allowed for effective planning and delivered important progress on key projects in the last six years. However, it is now clear that Sellafield’s complexity and technical uncertainties present significantly greater challenges than other NDA sites, and it is therefore less well suited to the transfer of full site-wide responsibility to the private sector via a PBO structure.”
He added: “The continued safe and secure operation of the Sellafield site will remain the overriding focus during the transition and under the new structure.”
John Clarke, NDA’s CEO, added: “This decision is the result of careful consideration and review of various commercial approaches in use where the combination of public and private sector comes together to deliver complex programmes and taxpayer value.
“I believe we can build on progress to date and drive further improvements in performance and value for money by enhancing the capability of the Site Licensed Company (Sellafield Ltd) through a different approach.”
NMP “surprised and naturally disappointed”
Iain Irving, NMP’s General Manager, said that the company was “surprised and naturally disappointed” about the decision, but highlighted that the NDA had “acknowledged the progress made by NMP over the last six years”.
Irving went on to state that the last 12 months had seen some of the site’s “highest levels of performance” and safety records, while the whole contract had "achieved savings to the UK taxpayer of over £650 million”.
He concluded: “Ultimately, we all share the same goal – the safe and secure operation of the Sellafield site. We will be working closely with the NDA in the light of this decision to determine the way forward and ensure that the significant progress and momentum that has been built on site during the last six years continues over the coming year and beyond.”
UK nuclear waste background
Sellafield is one of the largest and most complex nuclear sites in the world and is home to the vast majority of the UK’s civil nuclear waste. Its ageing infrastructure also includes commercial operating plants and historic waste stores.
At £1.8 billion per year it represents one of the largest public sector funded programmes, and with the infrastructure at Sellafield becoming increasingly dated, there is ongoing pressure on government to find a longer-term storage solution for the UK’s nuclear waste.
Central government has stated that its preferred plan is to build an underground nuclear waste disposal facility in the UK, but progress on these plans stalled in 2013 when Cumbria County Council decided to withdraw from the siting process, leaving government without a potential voluntary UK site.