nuclear agency to take on £46bn liabilities
The Independent, 25 June 2002
By Michael Harrison
Original address: http://news.independent.co.uk/business/news/story.jsp?story=308715
The Government is expected to detail plans next week to transfer £46bn
of Britain's civil nuclear liabilities to a new state-run agency.
Patricia Hewitt, the Secretary of State for Trade and Industry, is
due to publish a White Paper on 4 July setting out how the proposed
Liabilities Management Agency will operate.
However, the DTI is also expected to confirm that it will not introduce
a Bill paving the way for the agency in the next session of Parliament.
This will delay the transfer of the £46bn in liabilities from
the balance sheets of British Nuclear Fuels and the Atomic Energy Authority
for at least a year and possibly longer.
The delay will be a particular blow to BNFL, which accounts for three-quarters
of the UK's civil nuclear liabilities through its ownership of the Sellafield
reprocessing plant and the country's ageing fleet of Magnox reactors.
BNFL's liabilities for closing down and cleaning up its nuclear sites
now stand at £35bn and exceed its assets making the company
technically insolvent. Removing these liabilities would have helped
BNFL to press ahead with the part-privatisation of its fuel fabrication
and international clean-up divisions, the key element of which is Westinghouse.
The Atomic Energy Authority's liabilities stand at £8.9bn and
involve four sites, the biggest of which is the former fast-breeder
reactor at Dounreay, Scotland where more than half its 1,700 staff are
The other three sites are at the authority's Harwell headquarters,
Oxfordshire, Winfrith in Dorset and the original Windscale demonstrator
nuclear reactor in Cumbria.
The authority expects to continue to operate as the contractor for
the four sites once the new liabilities agency is set up. It would also
like to widen its remit to other BNFL sites, although the Government
is keen to bring private-sector contractors on board to improve efficiency
In advance of the new liabilities agency coming into operation the
Government has set up a shadow organisation run by an executive on secondment
from the car maker Ford. Bechtel, the US construction giant, will be
acting as adviser to the shadow body.