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Government spending watchdog says "too early to judge" Sellafield clean-up work

A report by government spending watchdog the National Audit Office has concluded that it is too early to judge whether the URS, Amec and Areva consortium brought in to decommission the Sellafield site is delivering value for money.

The report highlights the “considerable” challenge faced by the Nuclear Decommissioning Authority (NDA) in taking forward the clean-up of Sellafield, the UK’s largest and most hazardous nuclear site, but notes that to date the performance of some of the major projects at Sellafield has been poor.

But the NAO recognised that the NDA was seeking to redress this through the 2008 appointment of the Nuclear Management Partners consortium as the “parent body” of Sellafield. It said it was too early to judge whether this move, designed to improve performance by bringing outside expertise, was delivering value for money.

The NDA said it welcomed the report which “provides a useful external check on our progress and how we can improve performance further”.

Report in summary

The Authority inherited a legacy of poor planning and neglect over several decades when it took ownership of Sellafield in April 2005. The Authority achieved an important milestone in May 2011 when it approved a more robust lifetime plan for the clean-up of Sellafield site by 2120, replacing a previous unrealistic plan. The improved lifetime plan contributed to an increase in the Authority’s provision for decommissioning the site to £67bn as at March 2012, up from £47bn as at March 2009.

Significant uncertainties and scheduling risks remain, which the authority is working to understand and address. For example, there is considerable uncertainty over the time required and cost of completing facilities to treat and store highly radioactive material held in deteriorating legacy ponds and silos.

Today’s report concluded that it is too early to judge whether the appointment of Nuclear Management Partners Limited as the parent body of Sellafield is delivering value for money.

The parent body has achieved improvements in commercial operations on the site, including the reprocessing of spent nuclear fuel, and expects to deliver at least 80%of its planned savings of £1.4bn. However, the NAO found that some of the NDA’s 14 major projects at Sellafield have not provided good value for money. These projects are for the design and build of complex chemical engineering projects to retrieve, package and store hazardous nuclear material from old facilities. The projects range in cost from £21M to £1.3bn . Twelve of these projects delivered less than planned during 2011-2012, which could delay risk and hazard reduction.

The Authority is taking appropriate action to improve Sellafield Limited’s performance on major projects and its own capacity to oversee delivery. It is also considering how to strengthen the fee incentive framework if it chooses to renew the agreement with the parent body in 2014.


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