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MoD and contractor blamed for spiralling Devonport costs

THE NATIONAL Audit Office this week blamed the Ministry of Defence (MoD) and Devonport Management Ltd (DML) for a £357M cost hike on the Devonport dockyard upgrade.

A report out this week blames both parties for failing to control costs on the project to provide refitting and refuelling facilities for the Royal Navy's nuclear submarine fleet. Costs have risen from £576M in 1997 to £933M today and as design work continues the final figure could be more, it says.

It claims both parties 'contributed to the regulatory problems and thus to much of the total cost increase'.

'The practical implications, technical challenges, and subsequent cost effects of how the nuclear regulation regime would impact on this project were not fully appreciated by any party, ' it says.

The MoD is blamed for poor contract management, providing information late, and failing to be 'hands-on' about nuclear safety standards compliance. Port manager DML and its contractors are accused of poor performance and management.

Dispute over the cost hike between the MoD and DML has centred on the role of the Nuclear Installations Inspectorate (NII).

DML says the NII forced big design and construction changes by taking a more active role than on other nuclear dockyard jobs where the MoD had taken the lead.

But an agreement with the MoD in 1996 gave NII the lead regulatory role. The MoD says DML should have been aware of this and stringent NII requirements when signing the contract in 1997.

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