The government’s policy of handing over the clean-up of atomic power stations to the private sector was in crisis last night after the Nuclear Decommissioning Authority put on ice a £3.8bn plan to outsource the dismantling of five “Magnox South” plants, including Sizewell A and Dungeness A.
There has been talk of serious disagreements between the state-owned decommissioning authority and private companies over the price of the decommissioning contracts. Many have lost interest in opportunities in Britain.
An industry expert who asked not to be named said companies had entered earlier stages of the privatisation programme expecting profit margins of 10% to 15%. But the authority has since made clear it would be aiming at margins closer to 4%. It has been negotiating its budget for the next three years with the Treasury under the government’s spending review and is believed to be facing a squeeze.
Bob Churchill, the Nuclear Decommissioning Authority’s head of commercial, reiterated that it “reserved the right to reallocate funds to other [site licence companies]”. He also warned clean-up costs could soar as contractors switched to other infrastructure projects such as the Olympic games or possibly the building of new nuclear power stations.