Ownership of Sellafield Ltd has reverted to the Nuclear Decommissioning Authority (NDA), as Nuclear Management Partners (NMP) lose the £9bn Parent Body Organisation (PBO) contract to decommission the nuclear waste and reprocessing site.
The announcement comes following a year-long review by the NDA and recommendations to change the way the site was managed.
NMP, the consortium comprising of AECOM (previously URS), Amec Foster Wheeler and AREVA, originally won the contract as PBO for Sellafield Ltd in 2008; it was extended in 2013 by the NDA.
Since the contract was extended, NMP general manager Iain Irving said that "the site has enjoyed one of its best ever periods of performance and progress". However, NMP has been criticised for cost overruns and delays and the NDA have concluded that the complexity and uncertainty surrounding the decommissioning task at Sellafield is such that a different commercial model would be more appropriate.
The transition of Sellafield Ltd from NMP to become a “subsidiary of NDA” is expected to take 12-15 months, including new arrangements to find a "strategic partner" from the private sector to advise and assist the Sellafield Ltd executive team. Meanwhile Sellafield Limited continues to make progress and is currently on track to deliver against its key performance measures and milestones in 2014/15.
John Clarke, NDA’s CEO, said: “I believe we can build on progress to date and drive further improvements in performance and value for money by enhancing the capability of the Site Licensed Company (Sellafield Ltd) through a different approach.”
The Sellafield Ltd Board will continue to consist of existing non-executive directors and key members of the current executive team, but over time will now also see the introduction of NDA appointed directors.
Ed Davey, Secretary of State for Energy and Climate Change, said that engagement with the supply chain at all levels will remain central to the new approach, as well as close co-operation with workforce representatives, NMP, the regulators and the local community.
Sellafield Ltd have also released a statement that their work remains unchanged at the day-to-day operational level and the 10,000 nuclear professionals in their workforce are dedicated and committed to safely and quickly managing the clean-up of the UK’s nuclear legacy.
Sellafield consumes 60% of the NDA’s £3 billion annual budget and houses the vast majority of the UK’s civil nuclear waste.
Norman Harrison, Past President of the Nuclear Institute, said: "The Nuclear Institute welcomes the continued attention by the Government and the NDA on the resolution of the legacy decommissioning and waste disposal issues. The complexity of the legacy issues on the Sellafield Site results in considerable uncertainty of project outcomes; the NI expects the simpler commercial arrangements to enable the NDA and Sellafield Ltd to respond more easily and economically to the developing challenges."
The NDA last year increased its estimate for cleaning up the UK's nuclear sites by 7% to £110bn over the next 120 years, with Sellafield accounting for the vast bulk of the growth.