BNFL get OK for British Nuclear Group privatization

30 March 2006 - BNFL, formally British Nuclear Fuels Limited, has today gained Government approval to sell its specialist nuclear clean-up business, British Nuclear Group. The announcement coincided with news that the cost of cleaning up the UK's nuclear power plants could be more than £70bn ($121.5bn), according to the Nuclear Decommissioning Authority. The authority's previous estimate of the cost had been £56bn.

BNFL's Chief Executive Michael Parker said: "The sale is a positive strategic move for both the business and our employees. It gives the business the opportunity of increased performance and at the same time gives our employees increased career opportunities and the chance to earn a better future.

"We now look forward to working closely with the Nuclear Decommissioning Authority (NDA) to develop the criteria against which preferred bidders will be selected. I expect that there will be significant interest from potential purchasers."

Whether the private sector has the appetite to take on British Nuclear Group in the wake of spiraling costs of decommissioning, remains to be seen. The increase in estimates clean-up costs from the Nuclear Decommissioning Authority resulted from the discovery of 50 per cent more toxic waste in surveys carried out by submarine vehicles.

Environmental group Greenpeace commented, "Every time the costs of cleaning up nuclear sites are looked at, the cost for the taxpayer spirals. Its just one more reason why it would be insane to countenance building more nuclear power plants across Britain."

Lawrie Haynes, British Nuclear Group's Chief Executive, said: "A strong British Nuclear Group means strong competition and that can only be good news for the NDA and the UK taxpayer. The stronger we are, the better placed we are to safely deliver what I call 'Big V', that is the value we can create for UK taxpayer by reducing the overall lifetime bill for cleaning up the UK's nuclear legacy.

"We will deliver this value by making real progress in safely cleaning up the sites, actively managing the supply chain while at the same time demonstrating our clear commitment to the communities in which we operate.

"The right buyer will enable us to complement our skills with theirs to create a powerful player in the global nuclear clean-up market and 'raise the bar' in terms of subsequent competitions. This delivers enhanced value to the NDA by accelerating nuclear clean up in the UK.

The company also welcomes the NDA's strategy document published today which, amongst other things, outlines that with a new owner we will have the opportunity to continue to run the contract for managing and operating the Sellafield site until 2012, giving British Nuclear Group a fantastic opportunity to deliver significant value for the customer over the lifetime of that contract.

In order to further drive a competitive clean-up market in the UK, the NDA's strategy also requires the evolution of the Reactor Sites business into two separate "bundles", still owned by British Nuclear Group, in the run up to competition. This will enable each bundle to be competed separately.

It is expected that the sale process will be completed by autumn 2007, earlier if possible.


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