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Successive deadlines for cleaning up Sellafield over the years have been missed. Only two of the 14 major projects were being delivered on or ahead of schedule in 2011-12. Total lifetime costs for decommissioning the site continue to rise each year and now stand at £67.5bn.
The House of Commons Public Accounts Committee says in a new report* that the Nuclear Decommissioning Authority “needs to bring a real sense of urgency to its oversight of Sellafield so that the timetable for reducing risks does not slip further and costs do not continue to escalate year on year”.
It says: “Basic project management failings continue to cause delays and increase costs, while doubts remain over the robustness of the plan, in particular whether the authority is progressing the development of the geological disposal facility as quickly as possible”.
Committee chairman Margaret Hodge said: "An enormous legacy of nuclear waste has been allowed to build up on the Sellafield site. 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 £67.5bn, and there’s no indication of when that cost will stop rising.
“The Nuclear Decommissioning Authority believes that its decommissioning plan is credible but it has not been sufficiently tested and uncertainties remain – not least around what precisely is in the waste that lies in the legacy ponds and silos.
“It is unclear how long it will take to deal with hazardous radioactive waste at Sellafield or how much it will cost the taxpayer. Of the 14 current major projects, 12 were behind schedule in the last year and five of those were over budget. Furthermore, now that Cumbria County Council has ruled out West Cumbria as the site of the proposed geological disposal facility, a solution to the problem of long-term storage of the waste is as far away as ever.”
She continued: “Taxpayers will have to foot the bill. Private contractors who gain contracts take no risk because of the uncertainties that persist. The authority needs to determine when it will have enough certainty over costs to transfer risk to the private sector.
“Taxpayers are not getting a good deal from the authority’s arrangement with Nuclear Management Partners. Last year the consortium was rewarded with £54m in fees, despite only two out of 14 major projects being on track. All payments to Nuclear Management Partners and, indeed to its constituent companies, need to be strictly controlled and determined by the value gained, so that payments are not made where companies have not delivered.
The Nuclear Decommissioning Authority (the Authority), an arm’s-length body of the Department for Energy and Climate Change, was set up in 2005 with the specific remit to tackle the UK’s nuclear legacy. Sellafield is the largest and most hazardous site in the Authority’s estate and is home to an extraordinary accumulation of hazardous waste, much of it stored in outdated nuclear facilities. It is run for the authority by Sellafield Ltd, the company licensed by regulators to operate the site. In November 2008, the authority contracted with the Nuclear Management Partners (NMP) consortium to improve Sellafield Ltd’s management of the site, including the development of an improved lifetime plan.
NMP is composed of URS, Amc and Areva.
The authority has a cost reimbursement contract with Sellafield Ltd and all but one of the major projects at the site involve a cost reimbursement contract between Sellafield Ltd and its subcontractors. This means that taxpayers - rather than Sellafield Ltd or its subcontractors - bear the financial risks of delays and cost increases. This contracting approach may be the best option while the plan and individual projects contain significant uncertainties, but the authority has yet to work out how and when it will start to transfer more risk to the private sector, the MPs said.
The report, Nuclear Decommissioning Authority: Managing risk at Sellafield, The House of Commons Public Accounts Committee is available to download here: http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/746/74602.htm
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