Although nuclear decommissioning projects have been competitively bid in the past, the Nuclear Decommissioning Authority (NDA) will for the fi rst time introduce competition for management of the sites themselves.
'That is its two pronged strategy, ' explains Atkins head of nuclear, Paul Dollin.
'The NDA has to deliver value for money for the taxpayer. So it is determining a programme and introducing competition.' Suddenly consultants and contractors will be offered the prospect of doing not just one-off, stand-alone jobs, but a whole package of projects sitting side by side and running for years into the future.
Work is split into two main tiers. Tier One contracts are for site management while Tier Two work involves the physical decommissioning - which in turn is broken down into Tiers Three and Four as work is sub-contracted. NDA chairman Sir Anthony Cleaver says he expects the industry's largest international and multi-disciplinary firms to bid for Tier One site management contracts. These firms will also battle it out with a host of other hopefuls for Tier Two work.
British Nuclear Fuels (BNFL), through its new contracting division British Nuclear Group (BNG), and the UK Atomic Energy Authority (UKAEA), have three years' grace before NDA awards new licences, and both are obviously keen to hold on to their positions as site managers. They also plan to pitch for decommissioning work as major contractors.
BNG and UKAEA have been UK nuclear clients since the 1950s and both have accumulated vast knowledge and experience. But privately their competitors, including some of the UK's largest contractors and consultants, express doubts about either organisation's commercial credibility.
'You have to work in partnership, ' says Dollin.
'UKAEA and BNG are the major players in Tiers One and Two. Technically they are world class - there's not much they don't know. The question is whether they can wrap that up in a commercially-aware structure.' A former BNFL engineer, WSP senior environmental consultant Vicky Gaskin, fears that her old employer is still hide-bound by internal bureaucracy. Conforming to company protocol has had a stifling effect on innovation, she says, leading to a recent migration of employees to the contracting and consulting sectors.
But UKAEA and BNG sound bullish about their commercial health - both claim to be market hardened:
UKAEA has recently accelerated its programme of decommissioning work, exposing it to the cut and thrust of tendering, and financial and project management. BNG, through BNFL, has been in the thick of decommissioning in the US as a main contractor.
Cleaver remains discreet about the organisations' transition from monopoly to open, competitive market.
'They have two to three years to prove their credentials, ' he says.
The construction industry expects UKAEA and BNG to forge partnerships with experienced programme managers to win work at Tier One level and with innovative consultants and contractors to compete for Tier Two jobs.
Contracting ant mec shies away from taking on the challenge of a Tier One contract single handed, but would be keen to forge ties with either organisation.
'We are looking hard at opportunities at a Tier One level, ' says Amec head of nuclear Bob Churchill.
'But it is highly unlikely we would do so on our own. The question is whether we do it in conjunction with UKAEA, BNG, US contractors or even other UK firms. All the balls are in the air at the moment.' Consultants MWH, Mott MacDonald and EarthTech, and contractors Mitsui Babcock and Kier, confirm that discussion about the potential of the decommissioning market is rife, but that no hard and fast alliances have yet been forged. Most firms are waiting until the NDA publishes a full programme of work in July before committing to a partner or partners.
It is clear, however, that many are keen to draw in the skills and experience of US contacts or parent companies.
MWH and EarthTech are both establishing new UKbased decommissioning competencies with the aid of US parents. And this will no doubt please the NDA as it satisfies Cleaver's desire for increased competition.
Including BNFL and UKAEA, Cleaver reckons there are nine or ten firms internationally with the nuclear skills, experience and size to act as Tier One contractors. He would like to see bids from them all in three years time.
Projects will be let on a cost-reimbursement basis, with 4.4% bonuses paid to encourage innovation and performance. Cleaver thinks that a few years into the programme NDA will introduce a gain share system to reward - and stimulate - really dramatic performance against targets.
Contracts will run for three years or upwards.
But with more contractors competing for site management licenses, the new NDA regime will have a profound effect on Tier Two contractors. The Nuclear Industry Association (NIA) expects, for example, the number of firms dealing directly with the Tier One contractors to be slashed from the 15,000 that Sellafield had on its books 15 years ago to less than 100.
Yet Tier Two contracting is likely to be where money is to be made, according to NIA business development manager Norman Buckley.
'Management nd operation is, ultimately, cost reimbursable plus bonus for efficiencies, ' he explains. 'So actually doing the work could be higher value.' Firms without previous nuclear industry experience will probably have to enter the market as Tier Three subcontractors, he adds.