British Report Says Sellafield Costs Soaring as Cleanup Lags
Fees paid by the Nuclear Decommissioning Authority to the U.S.-led consortium managing decommissioning the U.K.'s giant Sellafield nuclear facility is not “a good deal” for British taxpayers, claims a new report by the influential parliamentary Public Accounts Committee. The average cost charged last year by the Nuclear Management Partners consortium for 16 executives reached $1.1 million with the highest earner costing the NDA $1.9 million.
Nuclear Management Partners is effectively winding down remaining operations and decommissioning some 200 facilities dating back 60 years at the 4-sq-km Sellafield site, in Cumbria, under an contract with five-year extension periods signed in late 2008. The contract, which covers some $2.5 billion annually, is due for its first extension late this year, subject to a satisfactory performance review by NDA. New York City-based URS Corp. leads the consortium with the U.K. Amec plc., London., and Areva S.A., Paris.
In 2012, “the consortium was rewarded with [$85 million] in fees, despite only two out of 14 major projects being on track,” says Margaret Hodge, Chair of the Public Accounts Committee. On top of the fees, NDA paid the consortium $44-million for the cost of 16 executives and experts of various kinds. As well as earning fees, consortium members secured $85-million of direct work at Sellafield, says the committee report.
However, “the majority of the projects are under reasonable control,” says John Clarke NDA's Chief Executive Officer. Excluding a contract to build the site's Evaporator D and another troubled project, 92% of the required work was delivered within 2% of schedule and budget, reports Clarke. On the roughly $630-million evaporator contract, the consortium has lost $27-million in fees and stands to forfeit another $39-million, according to Clarke.
Awarded in 2009 to Costain Group plc., Maidenhead, the evaporator contract was hit by a shortage of adequately skilled welders and incomplete early designs, according to a separate study by the National Audit Office. Originally due for completion in June 2014, the contract is now not expected to end until December 2015. Revised estimates put it at 60% above the original budget. The evaporator will process nuclear waste.
As NDA reviews the performance of Sellafield's management contract, it has just shortlisted four groups to bid for a 14-year deal covering 11 other nuclear sites of defunct power plants and research facilities. The successful bidder for the estimated $11-billion contract will take over operations of the power plant company Magnox Ltd. and of Research Sites Restoration Ltd., which manages the Harwell and Winfrith research sites.
The shortlist includes Reactor Site Solutions (Bechtel, EnergySolutions), The Babcock Fluor Partnership, CAS Restoration Partnership (CH2M Hill, Areva, Serco) and U.K. Nuclear Restoration Ltd. (AMEC/Atkins). A contract award is scheduled for early 2014.
