NDA took the decision to end the Magnox contract early because it underestimated the volume work ©PA Images
NDA took the decision to end the Magnox contract early because it underestimated the volume work ©PA Images

Nuclear clean-up contract to be brought in-house

4 July 2018

The Nuclear Decommissioning Authority (NDA) has said it will take in-house the contract to dismantle the UK’s earliest nuclear sites.

The contract to decommission 12 Magnox nuclear sites, which was awarded to the Cavendish Fluor Partnership (CFP), a joint venture between Cavendish Nuclear and Fluor Inc, will be taken over by NDA when the contract ends on 1 September 2019.

NDA took the decision to end the contract five years into its 14-year term because it had significantly underestimated the volume of radioactive waste that needed to be dealt with. At the time it said the decision to end the contract early was not a reflection on CFP’s performance.

David Peattie, chief executive of NDA, said the decision marked “a new approach” to managing the Magnox sites, but said it was consistent with a decision taken over the management of the Sellafield site in 2016, where a decommissioning contract was also terminated early.

He added: “I would like to thank [CFP] for their continued commitment in delivering the Magnox decommissioning programme. We will continue to work together to ensure a smooth transition to the new arrangements.”

The announcement is the latest development in a long-running saga over the £6.1bn tendering process for the contract, which ran between in April 2012 and September 2014.

The contract was to safely decommission 12 redundant Magnox nuclear reactor sites, including two nuclear research facilities, that dated from the 1950s and formed the majority of the UK’s first nuclear fleet. The sites were not originally designed with decommissioning in mind and pose a serious and dangerous technological challenge.

NDA took the decision last March to end the contract with CFP after the decommissioning authority admitted it had significantly underestimated the volume of work that needed to be done under the contract. By that point the projected cost had increased from the original quote of £3.8bn to £6bn because of a higher than expected volume of radioactive waste.

The awarding of the contract was also subject to a legal challenge in which the High Court ruled NDA had wrongly decided the outcome of the tender. NDA agreed a total payout of nearly £100m to losing bidders Energy Solutions and Bechtel in a no-liability settlement.

Both the National Audit Office and the Public Accounts Committee subsequently criticised the way NDA ran its tender for the contract, and the government has launched an inquiry into the tender and its early termination.

CFP will continue running the contract until 1 September 2019, at which point the company set up by CFP to deliver the project, Magnox Ltd, will become a subsidiary of NDA.

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