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Nuclear clear-up contracts too tough, says lawyer

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CONTRACTORS AND consultants will lose money on Britain's £56bn nuclear decommissioning programme because contract terms are too onerous, a leading construction lawyer warned last week.

'You'll be better off sticking your money in the post office, ' Rupert Cowen, head of Hammond's nuclear sector group, told NCE's nuclear decommissioning conference last week.

He warned that the Nuclear Decommissioning Authority's (NDA) draft procurement strategy did not offer rewards that any 'serious contractor is going to be competitively interested in'.

Under the draft strategy the winning bidders for site-wide decommissioning contracts will be paid costs plus 4.4%.

'Most of you [programme managers] won't get out of bed for less than 20% per cent, ' Cowen told the conference.

Cowen said that the NDA would only pay the 4.4% mark up if work was completed on time and that there were no fi ancial incentives for early completion.

In addition, the mark up only applies to some of the costs contractors would incur.

'Site funding limits will be imposed and supported by a framework of allowable and disallowable costs, ' says the NDA draft strategy.

This means that even if a contractor completes a project on time and is awarded the 4.4%, it could lose money if it incurred 'disallowable costs'.

Contracts offered by the NDA are all short-term, which Cowen argued does not allow for innovation or training of new staff.

'For a company to invest in training and development it must see long-term benefits. The strategy does not offer that.' The NDA strategy is still in draft form and is open for consultation until 1 November.

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