Decommissioning Nuclear Sites Costs Rise By £2.7bn
14th September 2020
Progress report: Terminating the Magnox contract by the National Audit Office.
This report examines the Nuclear Decommissioning Authority's management of the renegotiated contract in place with Cavendish Fluor Partnership.
Background to the report
Between 2012 and 2014, the Nuclear Decommissioning Authority (NDA) ran a competitive procurement exercise for a parent company to manage the decommissioning of two nuclear research sites and 10 Magnox sites. The latter comprise power stations that were at, or nearing, the end of their operational life. In September 2014, the NDA awarded the 14-year Magnox contract to Cavendish Fluor Partnership (CFP). In July 2016, the High Court ruled that the NDA had wrongly decided the outcome of the procurement process. In March 2017, the Secretary of State for Business, Energy & Industrial Strategy announced that the NDA had agreed settlements totalling £97.3 million with the bidder that brought the legal claims against the NDA. He also announced that the NDA had decided, based on legal advice, to terminate the contract with CFP nine years early due to a "significant mismatch" between the work specified in the tendered contract and the work that needed to be done.
In October 2017 we reported that the failed Magnox contract had cost the taxpayer more than £122 million by the time it was announced that it was to be terminated. We also found that the NDA's poor understanding of what was happening on the sites had contributed to serious problems after it awarded the contract to CFP in 2014, with its assumptions about the work required proving to be inaccurate. In 2018, the Committee of Public Accounts (the Committee) published a critical report and recommended that the NDA improve its understanding of the state of the sites, its ability to monitor work carried out on them, and the capability and expertise of its executive team.
The National Audit Office (NAO) has published a progress report into work the Nuclear Decommissioning Authority (NDA) is undertaking to decommission its Magnox estate.
It includes 10 reactor sites and two research facilities around the UK.
The expected cost of the operation has risen from £6bn in 2017 to £8.7bn.
The NDA came under serious scrutiny in 2017 after a legal challenge by bidder Energy Solution due to the flaws in the contract for the clean-up awarded to Cavendish Fluor Partnership (CFP).
In March 2017, the Secretary of State for Business, Energy & Industrial Strategy announced that the NDA had agreed settlements totalling £97.3 million with the bidder that brought the legal claims against the NDA.
The cleanup issues are huge and the estimates have been wrong but the National audit report may show they are on the right course now. Nevertheless with more billions being added to the cost it can hardly come at worse time considering all the other cost being piled up by the country.
Read the full report HEREe