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Nuclear Management Partners, a consortium of URS, Amec Foster Wheeler and Areva, took control of Sellafield Ltd as the parent body organisation (PBO) under a contract to the NDA in 2008. The contract was to run for up to 17 years and valued at £22bn.
However, NMP has come under fire from both the National Audit Office and the House of Commons public accounts committee for cost overruns and delays,
Under the new arrangement, Sellafield Ltd will become a subsidiary of the NDA from April 2016. A new management team will be appointed and governed by a newly-constituted board of the site licence company. In due course, a contractor will be appointed by Sellafield Ltd to strengthen the programme management and commercial capability at the site, under a similar structure seen at other major projects such as Crossrail and the Olympics.
This means that the private sector becomes a supplier to the site licensed company – Sellafield Ltd – rather than a parent of it. In effect, the business is being renationalised.
Energy secretary Ed Davey said: “It is now clear that Sellafield’s complexity and technical uncertainties present significantly greater challenges than other NDA sites, and it is therefore less well suited to the transfer of full site-wide responsibility to the private sector via a PBO structure.
NDA CEO John Clarke said: “This decision is the result of careful consideration and review of various commercial approaches in use where the combination of public and private sector comes together to deliver complex programmes and taxpayer value.
“I believe we can build on progress to date and drive further improvements in performance and value for money by enhancing the capability of the site licensed company (Sellafield Ltd) through a different approach.”
NMP general manager Ian Irving said: “We are surprised and naturally disappointed, especially in light of the considerable progress made at Sellafield since NMP was awarded the contract in 2008.”
Amec Foster Wheeler sought to point out that the termination of the contract was "not performance related and this change does not impact any other Amec Foster Wheeler project work on the Sellafield site”.
The company added: “It is vital that the lessons learned and the progress made since NMP were awarded the contract in 2008 should not be wasted. NMP has to date generated £650m of efficiency savings and met 96% of its targets last year while Sellafield's safety performance is now the best ever.
“NMP will continue to ensure that safe operations are maintained at the site, with the progressive implementation of a new contractual model. Amec Foster Wheeler looks forward to continuing a significant role in the decommissioning work at Sellafield.”
Sellafield consumes 60% of the NDA’s £3 billion annual budget and houses the vast majority of the UK’s civil nuclear waste. It also has commercial operating plants that support significant NDA income alongside historic waste stores and an enormous construction programme, all sharing an ageing infrastructure.
The existing parent body organisation model will continue to be used at other nuclear sites, where it is considered to be working effectively.
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