Improve Or Face Losing Contract, MPs Warn Sellafield Consortium

Posted by NucNet on 11 February 2014 in NucNet

A consortium of private sector companies brought in in 2008 to help Sellafield Ltd improve its performance on decommissioning and reprocessing had its contract extended in October 2013 despite “spiralling costs and poor performance”, a UK parliamentary report says.

The report, published today by the House of Commons public accounts committee, says the contract “must be terminated” if the performance of Nuclear Management Partners (NMP) does not improve.

The report criticises poor progress in nuclear decommissioning and reprocessing activities at the West Cumbria site by NMP.

NMP, a consortium made up of URS of the US, British company Amec and France’s Areva Group, is the parent body organisation for Sellafield Ltd, which is licensed by regulators to operate the site for the Nuclear Decommissioning Authority (NDA).

The report says timescales at Sellafield have slipped, costs have escalated substantially and reprocessing targets have been missed.

“Costs rise every year and the latest cash estimates for dealing with nuclear waste on the site exceed 70 billion pounds (GBP) (114 billion US dollars, 84 billion euros) in cash terms.”

The report says NMP was brought in to improve the performance of Sellafield Ltd, but “little improvement” has been achieved for extra money spent. NMP has not provided the clear leadership, strong management and improved capabilities needed to deliver the performance required at the site, the report says.

Despite this, the NDA extended NMP’s contract for a further five-year term and the justification for doing this is “highly questionable”.

The NDA must monitor NMP’s activities closely and terminate the contract should performance not improve, the report concludes.

Committee chair Margaret Hodge said costs are rising at “astonishing levels”. For example, the estimated cost of the ‘Magnox swarf storage silos retrievals’ project nearly doubled from GBP 387 million in March 2012 to GBP 729 million in September 2013.

NDA chief executive officer John Clark said in a statement today that performance at Sellafield “had not been as good as expected”, but there had been progress and that the site was in a better place now than when NMP took over. “After rigorous consideration the NDA had concluded that giving NMP further time to bring about improvements at the site was the best option at this time to give the best probability of delivering further progress.”

This is not the first time the public accounts committee has criticised performance at Sellafield. In a report in February 2013 it said an “enormous legacy” of nuclear waste has been allowed to build up on the Sellafield site. The committee said that over decades, successive governments have “failed to get to grips with this critical problem”, to the point where the total lifetime cost of decommissioning the site has now reached GBP 67.5 billion and there is” no indication of when that cost will stop rising”

Ms Hodge said it is unclear how long it will take to deal with hazardous radioactive waste at Sellafield or how much it will cost the taxpayer.

The committee said Sellafield is the largest and most hazardous of the nuclear sites owned by the NDA. Sellafield Ltd is the licensed operator of the site and manages the site under a contract with the NDA, which reimburses its costs of around GBP 1.6 billion a year.

According to the NDA, Sellafield is the largest industrial site in the UK and “the most complex” nuclear site in Europe.

The site has been operational since the 1940s and is also home to the world’s first commercial nuclear power plant, Calder Hall, which operated successfully from 1956 to 2003.

Today the site comprises of a wide range of nuclear facilities, including redundant facilities associated with early defence work, as well as operating facilities associated with the Magnox reprocessing programme, the Thermal Oxide Reprocessing Plant (Thorp), the Sellafield mixed oxide (MOX) fuel plant and a range of waste treatment plants.

The report is online