BNG sale plans announced

31 October 2006

Plans to break up and sell off the UK’s British Nuclear Group (BNG) have been approved by the government, opening up the Project Services specialist decommissioning arm for sale despite calls from some interested parties to sell the company as a single block.

Commenting on the decision secretary of state for trade and industry, Alistair Darling, said: “I have concluded that there are real benefits to the Project Services and the Magnox businesses in separating them from the process of choosing the right contractor for Sellafield,” the reprocessing facility located in Cumbria.

Accepting the joint recommendation of the boards of BNFL and the Nuclear Decommissioning Authority (NDA), ministers agreed that the best solution for the company would be to split up BNG before selling it. Under the proposals BNG will continue to operate the Sellafield site until the NDA can put in place a new contractor, potentially the middle of 2008, and BNFL will conduct individual sales of its other businesses on an early timescale to complete during the course of 2007.

Darling added: “I also believe that the best way of securing the right contractor for Sellafield is to proceed with a separate competition with the full focus on what is best at that site. That process will be run by the NDA.”

Key business areas of BNG include the management of the Sellafield and Magnox reactor sites along with the Project Services specialist contractor which is looking to expand non-NDA work.

The Reactor Sites business will be sold as a whole, but separately from other parts of BNG while the priority at Sellafield should be to support the creation of a competitive nuclear clean-up market in the UK and in particular to prepare the site for competition as safely and quickly as possible. This will enable the NDA to run a full competition for the Sellafield contract in the earliest possible timescale.

In a written statement to Parliament Darling said that while the BNG sale had originally been planned as a single entity by autumn 2007 this now appeared inappropriate. These concerns were reinforced by evidence in the market that instead of single buyers for BNG, consortia were being formed for the bid, suggesting that a future split of BNG was likely, with a risk that the non-Sellafield pieces might be sold on at a premium to the loss of the taxpayer.

Britain’s Prospect nuclear union welcomed the decision which ended the uncertainty facing the workforces at BNG and Nexia Solutions, although Prospect national secretary Mike Graham expressed disappointment that the government had opted to follow the recommendations of the BNFL board and break up BNG. However, the GMB, meanwhile, has reacted with anger to the announcement that the government will support the break up of BNG. Gary Smith, GMB national officer for the nuclear industry said: “This news is bad for safety. It is also the wrong decision if we want to develop the British nuclear industry on a global basis.”

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