A report from
Westminster’s Public Accounts Committee revealed
by The Irish Times and BBC seven years ago is now
confirmed by the National Audit Office. In a
progress report on the work, the National Audit
Office criticised the Nuclear Decommissioning
Authority (NDA), which oversees the plant, for
delays in cancelling a cleanup contract with the
consortium Nuclear Management Partners (NMP)
after demands from MPs a year ago to do so. Here
the entire report.
My Great Web page
Sellafield
decommissioning to take over 100 years. Now it's
confirmed.
By Massimo Greco
(March 2015)
It
will take more than 100 years before the
toxic nuclear site at Sellafield is safe,
it was revealed, for the first time,
7 years ago, in a report from
Westminster’s Public Accounts Committee
(PAC) published by BBC and The Irish Times in
July 2008, that was warning about the
cost of decommissioning of all nuclear
plants was likely to rise because
successive governments and the industry
found it easy to push costs on to future
taxpayers.
At the time,
anti-Sellafield protesters and South
Down SDLP MP Eddie McGrady said: “The
nuclear waste is a time bomb waiting to
happen. They are not only producing but
importing the dirty stuff from the rest
of the world, it is incredible.”
According to the article of The Irish
Times published in 2008 a spokesman for
Sellafield Ltd said: “Sellafield isn’t a
place that can just be closed down. It
is about the removal of plant and
equipment from the building, it is about
decontaminating and knocking them down -
that takes decades.
A lot of work has been done but with a
site as complex as Sellafield that will
take a long time to do carefully and
safely, which is the priority and can’t
be compromised on.”
He said it would cost £73 billion
(€91.3m) to decommission over the next
112 years.
Now there are "news"..
The Guardian reports that the expected
cost of decommissioning and cleaning up
Britain’s biggest and most hazardous
nuclear plant, Sellafield, has increased
by £5bn in a year, to £53bn, Whitehall’s
spending watchdog has disclosed:
The report said the
contract was terminated only last month,
at a cost to the taxpayer of £430,000 in
cancellation fees.
Margaret Hodge, the Labour chair of the
Commons public accounts committee (PAC),
which will question civil servants and
the NDA about the costs next week, said
the rise was astonishing and railed at
managerial incompetence at the plant.
“Despite my committee’s calls in
February 2014 for the Nuclear
Decommissioning Authority to make big
improvements, the cost of cleaning up
the nuclear waste at Sellafield
continues to soar,” Hodge said. “The
authority’s work at Sellafield is not
just costing more, it is also taking
much longer than planned, and for
2014-15 it looks like work will be
behind schedule for the fourth year
running.
“My committee concluded in February 2014
that the authority had not demonstrated
why Nuclear Management Partners’
ownership of Sellafield provides value
for money. Yet the authority only took
the decision in January 2015 to
terminate this contract with Nuclear
Management Partners, which is almost a
year after my committee told it to do
so.”
So, costs and times (already
astronomical) for the dismantling of the
nuclear site at Sellafield in Britain,
will rise again. The upward revision was
made official by the National Audit
Office who explained how the Authority
for nuclear decommissioning, public
entity that oversees the site, has
indicated the prediction of closure of
the entire process for 2120.
In addition, the Authority has indicated
that it will take almost 73 billion euro
to complete the job, so 5 more than
indicated in the forecast announced last
year.
The Sellafield site
for its history of disasters and
sufferings inflicted upon to population
in the name of "market democracy"... is
the best expression of nuclear "technology"
and crimes perpetuated behind the "draft
shield" of the "reason of state".
Progress on the Sellafield site: an
update
The update, intended to support an
evidence session of the Committee,
presents data either published by the
Nuclear Decommissioning Authority or
given by the Authority to the NAO. It
also summarizes the Authority’s
documents and explanations of progress.
March 2015
2001 - The Guardian:
Ireland to seek arbitration over new
Sellafield plant
Ireland is to take the British
government to arbitration over proposals
to open a new plant at the nuclear
reprocessing centre at Sellafield, it
emerged last night.
The action, which is thought to be the
first case of one state taking another
to an international tribunal for
violating freedom of information rules,
is likely to exacerbate tensions with
London following years of arguments over
the Cumbrian complex.
2013 OILPRICE COM:
Ireland Protests New British Nuclear
Plant
Now Ireland’s An Taisce, the National
Trust for Ireland, is pursuing a High
Court challenge in London over a planned
nuclear power plant, to be built at
Hinkley Point in Somerset, 150 miles
from the Irish coast. An Taisce
instituted the lawsuit after British
authorities did not
The National Audit Office
scrutinises public spending for Parliament and
is
independent of government. The Comptroller and
Auditor General (C&AG),
Sir Amyas Morse KCB, is an Officer of the House
of Commons and leads the
NAO, which employs some 820 employees. The C&AG
certifies the accounts of
all government departments and many other public
sector bodies. He has statutory
authority to examine and report to Parliament on
whether departments and the
bodies they fund have used their resources
efficiently, effectively, and with economy.
Our studies evaluate the value for money of
public spending, nationally and locally.
Our recommendations and reports on good practice
help government improve
public services, and our work led to audited
savings of £1.1 billion in 2013
Contents
Part One
Introduction 4
Part Two
Performance at Sellafield 6
Part Three
Revised delivery model for Sellafield 20
Appendix One
Major projects updated costs
and schedules 27
1.1 Sellafield is
the UK’s largest and most hazardous nuclear
site. It includes two
operational nuclear fuel reprocessing plants,
and waste treatment and storage plants
as well as legacy storage ponds and silos for
nuclear waste material from the UK’s first
generation of nuclear plants. The Nuclear
Decommissioning Authority (the Authority) owns
Sellafield and 16 other UK licensed civil
nuclear sites. The Authority is an arm’s-length
body, sponsored by the Department of Energy &
Climate Change.
1.2 The Sellafield site is hazardous because
of the historic build-up of contaminated
buildings and untreated waste on the site and
the age of its facilities. Since nuclear
operations began in the 1940s, successive
operators did not give sufficient thought to
decommissioning or retrieving and disposing of
radioactive waste. There are around 240
buildings on the site that are operating nuclear
facilities or buildings containing radioactive
materials. Some are deteriorating or fall short
of modern standards and pose significant risks
to people and the environment. The Authority’s
estimate of the lifetime cost of decommissioning
and cleaning up the site has been increasing
year-on-year.
1.3
In 2005, following the restructuring of the
UK nuclear industry and the creation
of the Nuclear Decommissioning Authority, the
Authority implemented a ‘parent body
organisation’ model for the operation of its
nuclear sites. Under this model the site
licence companies manage the sites under
management and operations contracts with
the Authority. The Authority sets strategic
objectives for the sites and the site licence
companies develop, implement and maintain a plan
to meet those objectives. The main rationale for
this model was to have private sector owners of
the site licence companies, to provide
leadership and enhance the companies’
competencies and capabilities. The Authority
selects the parent body organisations for the
sites through competitive tenders
1.4 Under this model,
in November 2008 the Authority appointed Nuclear
Management Partners Limited, a private sector
consortium of AECOM (formerly URS), AMEC Foster
Wheeler and AREVA, as ‘parent body’ owner of
Sellafield Limited, the licensed operator of the
site. (1)
The Authority reimburses Sellafield Limited for
its expenditure on the site and pays base and
performance fees to Sellafield, who may pass
them to Nuclear Management Partners as dividends.
The Authority regains ownership of Sellafield
Limited when the agreement ends, but the
agreement also includes a clause allowing early
‘termination for convenience’.
1.5 In September 2013 the Authority continued
its agreement with Nuclear Management Partners
into the second 5-year period of the 17-year
agreement.
In January 2015, after a strategic review of the
delivery model at Sellafield, the Authority
announced its decision to terminate its contract
with Nuclear Management Partners and implement a
new delivery model.
Background to this update
1.6 We have produced two reports on progress
with nuclear decommissioning at Sellafield. The
first, published in November 2012, examined how
the Authority manages risk at Sellafield,
focusing on performance on the largest projects.
(2)
The second, published in October 2013 was in
response to a recommendation by the Committee of
Public Accounts (the Committee), and examined
how the Authority gains assurance about the
level of reported efficiency savings. (3)
The Committee has also published two reports, in
February 2013 and in February 2014, when it
reported on progress on the site and the
Authority’s decision to continue the agreement
with Nuclear Management Partners into a second
term. (4,5)
1.7 This update explains developments in the
management of the site at the end of the current
Parliament. The update presents data the
Authority published, or that it gave to us, and
summarises the Authority’s documents and
explanations of progress. We have checked the
consistency of the data to sources, where
possible, but we have not audited the
Authority’s underlying records.
The update addresses:
• progress on the Sellafield site and its major
programmes and projects and Sellafield Limited’s
capability and capacity (Part Two); and
• the Authority’s review of the delivery model,
and its plans for transition to a
new model (Part Three).
1 The Sellafield site
includes three licensed sites: Sellafield,
Windscale and Calder Hall.
2 Comptroller and Auditor General, Managing risk
reduction at Sellafield, Session 2012-13, HC
630, National Audit Office,
November 2012.
3 Comptroller and Auditor General, Assurance of
reported savings at Sellafield, Session 2013-14,
HC 778, National Audit Office, October 2013.
4 HC Committee of Public Accounts, Nuclear
Decommissioning Authority: Managing risk at
Sellafield, Twenty-fourth Report of Session
2012-13, HC 746, February 2013.
5 HC Committee of Public Accounts, Progress at
Sellafield, Forty-third Report of Session
2013-14, HC 708, February 2014.
2.1 Decommissioning and cleaning up Sellafield
will involve completing current commercial
operations and decommissioning and demolishing
the buildings on site.
The highest hazard facilities on the site are
the four legacy ponds and silos. The Nuclear
Decommissioning Authority’s (the Authority’s)
strategy prioritises making clear progress on
these programmes. In this part we address
progress at site level, on the legacy ponds and
silos programmes, and on the largest projects on
the site, many of which are within the legacy
ponds and silos programmes.
Overall progress on the site
2.2 The Authority aims to clear the Sellafield
site by 2120.
This requires completion of:
• fuel reprocessing operations on the site;
• retrieval and packaging of waste from existing
storage facilities;
• transfer of waste to the Low Level Waste
Repository and the proposed geological disposal
facility;
• vitrification of high-level radioactive waste;(6)
• transfer of high and intermediate level waste
into safe containers and storage; and
• final site clearance.
The Authority’s detailed work schedule for the
site provides for decommissioning and clean-up
work to be complete by 2135 but the Authority
expects to be able to complete decommissioning
by 2120.
Lifetime
cost of decommissioning the site
2.3 The Authority’s estimate of the lifetime
cost of decommissioning at Sellafield
has been increasing sharply in recent years.
The Authority presents its estimate
as a provision in its annual accounts. As at 31
March 2014, the Authority estimated
the Sellafield provision at nearly £48 billion
after discounting future cash flows. This is
around 74% of the Authority’s total nuclear
provision of nearly £65 billion and an increase of
nearly £6 billion (14%) since March 2013. The
estimated provision for the rest of the
Authority’s estate has remained relatively
stable (Figure 1).
6 - Vitrification
is the process of turning waste into glass.
2.4 Between
2010-11 and 2013-14 the nuclear provision
for Sellafield has increased by more than £15
billion. More than £12 billion of this is from
increases in estimates of the cost of work
required to complete decommissioning and clean
up across the site. The rest is from other
changes including the approach to discounting
and inflation, and reductions in the estimate of
the provision because of work done in-year.
Between 2012-13 and 2013-14, cost estimates
increased by more than £6 billion, driven by
increases in some major project costs and the
removal of previously assumed efficiencies that
had been built into the performance plan but
which the Authority subsequently deemed to be
unachievable. Figure 2 shows the breakdown of increases in
the provision for Sellafield between 2010-11 and
2013-14.
2.5 The
Authority considers that the increase in its
lifetime cost estimates is mainly because it now
has a better understanding of the scale and
nature of the risks and challenges on the site.
In particular, it reflects an improving
understanding of the challenges, potential
technical solutions and uncertainties still
involved in the decommissioning projects and
programmes to retrieve, package and store high
risk, hazardous materials. It also reflects a
more realistic assessment of the level of
efficiencies achievable within the plan. We
discuss these projects and programmes in more
detail later in this part.
2.6 The
Authority bases its management judgement of the
overall nuclear provision on the lifetime plans
for the sites across its estate. The
Authority had intended that its Board would
approve a new lifetime plan for Sellafield in
April 2014. However, this did not happen until December 2014.
This delay was due to Sellafield Limited
delivering its proposed plan late and the
Authority’s Board deciding in July 2014 that it
was unacceptable.
2.7 As at
February 2015, the Authority’s estimate of the
discounted nuclear provision for the Authority’s
estate was around £70 billion, of which £53
billion relates to Sellafield (an increase of £5
billion from 2013-14). We have not yet audited
these figures. We are reviewing the Authority’s
assurance over the 2014 performance plan as part
of our audit of the Authority’s financial
statements for the year 2014-15, so that the
Comptroller and Auditor General can reach an
opinion on whether the financial statements,
including the latest estimate for the nuclear
provision, are true and fair.
Year-on-year site level performance
2.8 Since
the May 2011 performance plan, work on the site
has cost more and taken longer than planned
(Figure 3 on page 10). The Authority and
Sellafield Limited routinely monitor performance
on cost and schedule against the performance
plan for the site.
It monitors performance at an aggregate level,
based on detailed data for the projects within
the 23 programmes on site. Cost and schedule
performance against the plan deteriorated
slightly between 2012-13 and 2013-14. During
2014-15 performance has improved, with in-year
costs being slightly less than planned, and
progress against schedule being closer to,
though still behind, plan.
Performance
with ongoing commercial fuel
reprocessing operations
2.9 As well as decommissioning activity,
Sellafield Limited also carries out
commercial operations, mainly fuel
reprocessing. The Committee of Public
Accounts (the Committee) highlighted in
its February 2014 report that Sellafield
Limited had rarely achieved its output
targets for its reprocessing operations.
It noted the Authority’s explanation
that the varying performance from year
to year reflected the stretching targets
it had set and the inherent fragility of
the old reprocessing plants.
In 2013-14, Sellafield Limited improved
its performance on two of its reprocessing
operations but achieved just over half
of its target for highly active liquor vitrification.
The Authority forecasts that in 2014-15,
Sellafield Limited will exceed its
vitrification target, and improve its
performance on the previous year.
However, due to outages at the
vitrification plant,
the target for 2014-15 was set much
lower (Figure 4).
Progress in decommissioning the legacy
ponds and silos
2.10 Estimated completion dates for the
four legacy ponds and silos programmes
were extended significantly between 2007
and 2010 and brought forward again when
the Authority agreed the 2011
performance plan. In its latest lifetime
plan, Sellafield Limited has made little
change to its estimated forecast
completion dates for the two pond
programmes which are in the construction
phase. Sellafield Limited has put back
its expected completion dates for the
two silos programmes, by 10 and 14 years
respectively. These programmes are in
the planning and design phase and
Sellafield Limited has re-evaluated its
estimates of the time it will take to
retrieve waste (Figure 5 on page 12).
2.11 The revisions to the completion
dates for the legacy ponds and silos in
the 2014 performance plan reflect slower
progress than expected over recent
years and Sellafield Limited’s improved
understanding of the challenges that may
be involved. Sellafield Limited has not
met the planned schedules in the May
2011 performance plan for any of the
four legacy ponds and silos programmes.
It has fallen behind schedule the most
on the pile fuel cladding silo programme
and made best progress on the pile fuel
storage pond, where progress is just
behind schedule. It has delivered the
work at lower than the budgeted cost for
two of the programmes but exceeded it
for the other two (Figure 6 overleaf).
Progress on the most high-value,
high-risk projects
2.12 We reported in 2012 that Sellafield
Limited had made poor progress on its
portfolio of 14 major projects. Many
projects fall within the legacy ponds
and silos programmes, providing bespoke
equipment, buildings and systems to
remove, treat, package, move and store
waste. Some relate to the operation of
the site and reprocessing spent nuclear
fuels.
We reported delays and cost overruns on
projects in planning and design, where
schedules and costs may be particularly
uncertain because of the uncertainties
of the volume and nature of the waste
and the technical solutions needed to
manage the decommissioning. We also
reported poor progress on projects in
the construction phase. The Authority
has provided updated cost and schedule
data for the projects that we reviewed (Appendix
One). Two of the original projects in
planning and design have since been
cancelled or incorporated into other
projects. Three of the major projects in
construction have been completed, with
little further cost escalation or delay
since 2013, and two projects have moved
from planning and design into
construction.
One further major project has entered
the planning and design phase. Therefore,
of the original fourteen projects, nine
remain active, with three in planning
and design and six in construction.
Estimated completion dates of the nine
remaining major projects
2.13
Sellafield Limited has put back
considerably most of the nine remaining
major projects since they were initiated,
putting back the completion dates
further since September 2013. In
aggregate, Sellafield Limited has put
back the estimated completion dates for
the three projects still in planning and
design by 143 months since they were
initiated. Eighty six months of this
change in estimated duration has
occurred since September 2013. The vast
majority of the changes relate to two
complex retrieval and treatment plants:
pile fuel cladding silo and silos direct
encapsulation plant.
2.14 Sellafield Limited has put back the
estimated completion dates for the six
projects now in the construction phase
in aggregate by 271 months since they
passed their design gate (the date the
project design is approved to begin
construction). 100 months of this change
has occurred since September 2013. Since
September 2013 the increase in duration
is largely attributable to the magnox
swarf storage silos retrieval project
and the box transfer facility, both of
which have been deferred to align with
the revised silos direct encapsulation
plant availability.
2.15 The estimated completion dates for
two further projects – the box
encapsulation plant product store direct
import facility, which is in planning
and design, and the silos maintenance
facility, which is in construction –
were extended by 12 months between
September 2013 and December 2014. This
was due to under-estimation of the scale
of the challenge and the need to align
the projects with the magnox swarf
storage silo programme.
Estimated costs of the remaining
major projects
2.16 Since September 2013 the estimated
costs for most of the original remaining
major projects have been stable, for
projects in both the planning and design
and construction phases (Figure 7 and
Figure 8). However there has been a
substantial increase of £1.4 billion in
the lifetime cost for the silos direct
encapsulation plant, a complex treatment
plant in the planning and design phase.(7)
This has resulted in the total lifetime
costs of the remaining nine major
projects increasing to around £7 billion.
In addition, one new project – the box
encapsulation plant project – has gone
into the design phase.
This project has been accelerated in
order to accept waste from the magnox
swarf storage silo ahead of the
availability of the silos direct
encapsulation plant. The Authority
estimates that this project will cost
around £492 million.
7 - The
Authority estimates time and cost ranges
for projects. In this report we have
used the Authority’s mid-point estimate
for the estimated costs of major
projects. After a quantification of
risks, the Authority considers there to
be a 50-50 chance that costs will come
in below this mid-point estimate.
2.17 The estimated cost of the silos
direct encapsulation plant has doubled
from £1.3 billion in September 2013 to
£2.7 billion in December 2014 (Figure
7). In 2012 we reported that this is the
third attempt to design a plant to
receive, treat and immobilise the waste
from the magnox swarf storage silo. At
that time Sellafield Limited was
planning to recompete the project. Since
awarding the contract Sellafield Limited
has confirmed its cost estimate with
greater certainty, but has moved its
expected completion date back from
August 2020 to June 2026. This project
has accounted for the majority of the
overall extension to completion dates
for major projects.
2.18 The magnox swarf storage silos
retrievals project and the pile fuel
cladding silo project, which accounted
for a significant proportion of the
increase in estimated costs from March
2012 to September 2013, have not shown
further significant increases in their
estimated costs to December 2014 (Figure
7 and Figure 8). The Authority expects
further clarification of costs and
schedules on the pile fuel cladding silo
project – in due course.
• Magnox swarf storage silos
retrievals project
The project is to construct equipment
and systems to safely remove radioactive
waste from the storage silo. It is to
commission its first machine in 2017,
when the Authority expects there to be
an opportunity to reduce the risk of the
overall programme. The end date for the
delivery of the final machine is linked
to the silos direct encapsulation plant
project and so the project’s final
completion date has been put back from
2023 to 2025 (Appendix One).
• Pile fuel cladding silo project
The project is at the design stage for
integrated systems for retrieval of the
waste from this silo, and is being
re-planned. The Authority expects the
revised plan to reduce the uncertainties
in the proposed approach and result in a
more robust cost and delivery schedule.
Progress with improving the
capability and capacity of Sellafield Limited
The use of staff from Nuclear Management
Partners
2.19 As the parent body organisation,
Nuclear Management Partners has provided
executives and secondees on a
‘reachback’ basis to Sellafield Limited
to improve its capability and capacity,
with the costs reimbursed by the
Authority.(8)
We reported in 2012 that the Authority
had reviewed Sellafield Limited’s use of
executives and reachback. The Committee concluded in its 2013
report that Nuclear Management Partners
had not provided the leadership critical
for success at Sellafield, and that
the Authority should monitor, and
challenge where appropriate, the use
made of Nuclear Management Partners’
executives and experts and the terms on
which they are employed.
8 -
‘Reachback’ refers to Sellafield
Limited’s use of staff from Nuclear
Management Partners’ companies at
Sellafield.
2.20 The Authority committed to continue
to monitor and challenge the appointment
of Nuclear Management Partners’
executives and experts and these costs
have fallen. The Authority estimates
that the cost of seconded executives,
including salary, tax, expenses and
incentives, has reduced to £6.4 million
in 2014-15 from a peak of £11 million in
2011-12.
There were 14 full-time equivalents in
executive positions between 2012-13 and
2014-15, reduced from 17 in 2011-12 and
19 in 2010-11. The Authority estimates
that the cost of reachback – including
salary, plus overhead plus reasonable
expenses – will have reduced to less
than £10.8 million in 2014-15, from a
peak of £25.1 million in 2012-13. The
number of full-time equivalents is
forecast to reduce to 40 in 2014-15 from
92 in 2012-13.
Procurement, contracting and project
management.
2.21 In January 2013 the Committee
expressed concern that taxpayers were
bearing the financial risks of delays
and cost increases, as all bar one of
the major projects at the site involved
a cost reimbursement contract between
Sellafield Limited and its
subcontractors. The Committee
recommended that the Authority should
determine how and when it will have
achieved sufficient certainty to expect
Sellafield Limited to transfer risk down
the supply chain on individual projects
and then to reconsider its contracting
approach for the site as a whole. The
Authority reports that it is still
aiming to complete its intended review
of procurement and contracting across
the Sellafield programme by December
2015, to identify the scope for transfer
of delivery risk to the private sector.
It reports that it has taken a first
step by identifying where work is
sufficiently certain to support transfer
of more delivery risk to the supply
chain in its assurance of the 2014
performance plan.
2.22 In November 2013 Nuclear Management
Partners confirmed to the Committee of
Public Accounts that there was scope for
improvement within Sellafield Limited in
project management, business case
preparation and cost estimation,
procurement strategy, supply chain
management, design capability and
engineering. The Authority told the
Committee it would monitor the
performance of Sellafield Limited and
Nuclear Management Partners against the
updated 2014 lifetime plan and an
‘excellence
plan’. These plans set out Nuclear
Management Partners’ expectations for
Sellafield Limited. The Authority also
set specific measures and targets for
2014-15 in areas including performance
on site, capability improvements and to
maintain very good
safety performance. Of 27 success
criteria that the Authority set
Sellafield Limited, the Authority is
forecasting that Sellafield Limited’s
performance will be ‘excellent’ in 5,
‘good’ in 8 and ‘adequate’ in 13. One
milestone – the appointment of a
director in
charge of security – was missed, but
this post has now been filled.
Delivery of wider economic benefits
2.23 Sellafield Limited is due to
finalise its new socio-economic strategy
by the end of March 2015, in response to
a recommendation from the Committee of
Public Accounts, and has reported some
increase in its use of apprentices and
commitment to skills enhancement and its
spending with small and medium-sized
enterprises. In April and September
2014, the Authority and Sellafield
Limited jointly published progress
updates on their approach to developing
skills and contributing to
socio-economic development in and around
Sellafield. In 2014 Sellafield Limited
had increased its use of apprentices,
trainees and graduates by nearly 40%
since 2012; and in 2013-14 increased its
direct spending with small and
medium-sized enterprises to 7.6%, with
total Sellafield supply-chain spending
with small and medium-sized enterprises
now being 19%.
Fee payments to Sellafield Limited
2.24 To the end of the first five-year
term of the contract, the Authority has
paid a total of £237 million in fees to
Sellafield Limited for meeting its
targets and objectives, from which
Nuclear Management Partners receives
payments as dividends. This is in line
with the £230 million the Authority
previously advised the Committee it
could be (Figure 9). The Authority
has not yet finalised the level of fees
that Sellafield Limited will receive in
2014-15, against its assessment of
maximum fees available for 2014-15 of
around £53 million.
2.25 According to updated information
provided to us by the Authority, which
we have not audited, the Authority has
now agreed that Sellafield Limited
actually delivered efficiency savings of
£715 million over the period 2008-09 to
2013-14. (9)
At the time of our October 2013 report,
Assurance of reported savings at
Sellafield, the Authority was
forecasting that Sellafield Limited
would achieve total efficiency savings
between 2008-09 and 2013-14 of £691
million compared to a target of £699 million
(in 2012 prices).
Efficiency savings drive one of the main
incentive based fee categories,
alongside performance in meeting project
milestones and identifying work that can
be removed from the programme without
affecting overall progress on the site.
In October 2013 we reported, in response
to a request for assurance from the
Committee, that the Authority’s systems for
recording, scrutinising and challenging
claimed site-wide savings at Sellafield
provide moderate assurance of reported
overall savings.
9 -
The original target for site-wide
savings was £796 million over the period
(2012 prices). During 2012-13, the
Authority removed legacy ponds and silos
from the efficiency fee mechanism as it
sought to incentivise progress on the
ground rather than cost efficiency. It
is for this reason that the efficiency
savings target was reduced.
3.1 In September 2013 the Nuclear
Decommissioning Authority (the
Authority) announced that it would
continue the contract with Nuclear
Management Partners into its second
5-year period. It acknowledged to the
Committee of Public Accounts that
performance had been worse than expected,
and explained that with the Department’s
agreement it had extended the contract
with Nuclear Management Partners because
it considered this was the best option
available at the time. The Authority
told the Committee that in reaching this
decision it had explored two
alternatives: to re-let the contract; or
to dispense with the parent body and
operate with Sellafield Limited as a
subsidiary of the Authority. In addition,
the Authority stated that it could use
the ‘termination for convenience’ clause
in the contract at any time.
3.2 In its February 2014 report, the
Committee concluded that “(t)he
Authority has not demonstrated why,
given the lack of risk transferred to (Nuclear
Management Partners) this ‘parent body’
arrangement at Sellafield provides value
for money”.
The Committee recommended that the
Authority, “should set out how it might
transfer more of the delivery risk to
contractors under its existing
arrangements and how it will ensure that
its alternative arrangements are viable
to enable it to terminate the current
contract should performance continue to
prove unsatisfactory”.
In its response to the Committee’s
recommendation, the Authority stated
that it has “viable alternatives to the
current contractor, contract and PBO
model. These alternatives will be
maintained and developed further during
2014”.
3.3 In March 2014 the Authority began a
strategic review of the delivery
arrangements, because it recognised that
the parent body organisation model,
while beneficial in the early days, was
no longer providing value for money at
Sellafield. The stated objective
of the review was to:
“identify the business model for the
operation of Sellafield Limited that
best secures the outcomes of safety,
expedited remediation of the high-hazard
facilities and value for money (including
risk transfer)”.
3.4 The Authority’s review included:
•
clarifying the success requirements;
• research and interviews with
stakeholders to identify opportunities
for improvement;
• developing hypotheses about the causes
of poor performance; and
• reviewing delivery models used on
major programmes in the public and
private sectors and the nuclear and
other sectors.
3.5 After assessing a long-list of ten
delivery model options, the Authority
reviewed in detail a short-list of three:
• Option 1: retaining the parent body
organisation model with Nuclear
Management Partners remaining as the
parent body, but with steps taken to
improve performance;
• Option 2: retaining the parent body
organisation model, but holding a
competition for a new parent body with a
modified contract to help improve
performance; and
• Option 3: a ‘market-enhanced site
licence company’, with the Authority
taking back ownership of Sellafield
Limited from Nuclear Management Partners,
and Sellafield Limited contracting with
a strategic partner to bring in the
required private sector expertise.
3.6
The Authority took steps to gain
assurance about the quality of its
strategic review.
For example, it used a panel of industry
experts to provide advice about the
options being considered, and in
December 2014, the Major Projects
Authority carried out a Project
Assessment Review of the process. The
Major Projects Authority review found
that the case for change had broad
support and that the Authority had
managed its stakeholders well. The Major
Projects Authority also stated that
additional assurance about the
Authority’s role in managing the
transition could strengthen the process
further.
The Major Projects Authority and the
Major Projects Review Group plan to
review, in March 2015, the Authority’s
approach to invoking the ‘termination
for convenience’ clause in its contract
with Nuclear Management Partners, and
the readiness of the
Authority and Sellafield Limited to
proceed with transition, with particular
attention to the implementation plans,
the risk strategy and the realisation of benefits.
The preferred delivery model
3.7 In November 2014, the Authority
produced a business case recommending
that its Board and the Department of
Energy & Climate Change (the Department)
approve a move to option 3, the
market-enhanced site licence company.
The business case showed the
market-enhanced site licence company
option outscored the other options on
all evaluation criteria. In summary,
the Authority assessed the main
advantages of this option:
• Simplicity of relationships and
accountabilities between the main
parties.
• Improved ability to incentivise
long-term outcomes in smaller-defined
packages of work given inherent
uncertainties on the site.
• Better alignment of objectives and
incentives between the Authority and the
leadership in Sellafield Limited.
• More enduring and motivating
leadership within Sellafield Limited.
• Better access to the market for
enhancing and developing capability.
• More opportunities to transfer
delivery risk from Sellafield Limited to
the market.
3.8 The Authority concluded that the
market-enhanced site licence company
could bring significant savings and
benefits compared with the alternatives.
The Authority’s business case states
that the appraisal was designed to
compare the three options, not to
provide a baseline against which to
measure the costs and benefits of the
new model. The main reasons for the
higher forecast net benefits of the
market-enhanced site licence company are
reduced costs through lower payments to
the private sector partner and the
potential for greater efficiency savings.
We have not audited the assumptions
underpinning the Authority’s analysis.
3.9 In January 2015, Ministers at the
Department and HM Treasury and the
Department’s Accounting Officer approved
the Authority’s recommendation and the
Authority decided to terminate its
contract with Nuclear Management
Partners. It will cost the Authority
around £430,000 to break the contract
with Nuclear Management Partners. Figure
10 shows a timeline of events between
the Authority’s decision to continue its
agreement with Nuclear Management
Partners and the decision to terminate
for convenience.
Transition to the new model
3.10 Under the Authority’s revised model,
Sellafield Limited will be assisted by
private sector partners rather than
being owned by a private consortium
(Figure 11 overleaf).
The main features of the proposed model
are:
• the Authority will take back ownership
of Sellafield Limited as a subsidiary,
and will act as strategic authority and
owner;
• the Sellafield Limited Board will be
chaired by an independent non-executive
director, with support from three
independent non-executive members.
The Authority will provide two
non-executive directors;
• up to four Sellafield Limited
executive directors, including the chief
executive officer, will also sit on the
Board; and
• Sellafield Limited will recruit a
strategic partner and potentially a
number of programme partners from the
private sector to provide it with
additional expertise.
3.11
Under the market-enhanced site licence
company, the Authority proposes that the strategic
partner will support Sellafield Limited
in three phases:
• the development of a revised site
strategy, including identifying where
there are gaps in Sellafield Limited’s
capability and breaking up the site into
more manageable packages with
better-defined scope;
• implementing the site strategy,
including procuring programme partners
to manage key projects and programmes;
and
• supporting delivery of decommissioning
and clean-up through management of contracts
and integration of activities across the
site.
3.12
The Authority envisages that payments to
the strategic partner and the programme
partners will be through a combination
of cost-reimbursement, fees for delivery
of key milestones, and a share of
savings made against target costs. The
Authority considers
that the majority of potential fees for
the strategic partner and programmes
partners will be available in the final
phase, upon delivery of savings and
meeting milestones.
3.13
The market-enhanced site licence company
model is similar to those that we have
seen on, for example, the construction
programme for the London 2012 Olympic
and Paralympic Games and Crossrail. The
Olympic Delivery Authority appointed a
delivery partner to provide expert
support and resource in managing the
programme and to take control of overall
management of construction activities.
Crossrail Limited appointed a project
delivery partner, to manage the
contractors responsible for the
construction of the Central Section
Works and the interfaces with other
parties such as Network Rail and London
Underground. It also brought in a
programme partner to provide overall
programme and project management and
control.
3.14
The Authority has appointed its
Sellafield Programme Director as Senior
Responsible Officer for the transition
to the new model, and has set out an
outline plan for the transition
programme, which it expects to further
develop with Sellafield Limited and
Nuclear Management Partners. The
Authority will firm up the plan by May
2015.
The baseline plan for the main critical
activities is to:
• confirm the senior management team for the
transition period, including the chair
and chief executive, and any ongoing
requirements for secondees from Nuclear
Management Partners by March 2015;
• serve the ‘termination for convenience’
notice to Nuclear Management Partners
on 31 March 2015;
• finalise the transfer of shares in
Sellafield from Nuclear Management
Partners to the Authority on 31 March
2016;
• issue an Official Journal of the
European Union (OJEU) notice for the
procurement of a strategic partner for
Sellafield Limited, with appointment
expected in 2016; and
• appoint programme partners as required.
3.15 While the transition process is
underway, the Authority expects that
staff from Nuclear Management Partners
will continue to lead and work on the
site, to ensure maintenance, safety,
security and delivery over the
transition period. Following share
transfer, Nuclear Management Partners’
staff will progressively move out of
their roles and be replaced by a new
management team over a period of six
months. As with previous years,
the Authority expects there to be fees
available to Sellafield Limited during
the transition period and that these
will be linked to performance on the
site.
However, the Authority is in the early
stages of defining how Nuclear Management
Partners will be incentivised and
compensated during transition.
3.16
The Authority recognises that there are
key risk areas associated with the
transition
to the new model:
• Stakeholder responses to the proposed
change in delivery model
The Sellafield workforce is one of the
key stakeholder groups and the Authority
considers that, on the whole, they are
likely to be supportive of the change.
• The Authority’s capability and
capacity to implement the transition
The Authority states that it will
augment its capacity to manage the
change with advisers; a senior, interim
appointment to help manage the process;
and use of project management capability
within Sellafield Limited.
• Securing suitable people to replace
secondees from Nuclear Management Partners
The Authority is confident in the
capability of the current chair and
managing director to start the process.
• Obtaining and managing a strategic
partner
The Authority and Sellafield Limited are
taking advice from the market about the
availability of suitable companies and
expect to apply lessons from other
relevant best practice and the
Authority’s competitions, which it has
overseen for other nuclear sites.
• Realising the expected benefits of the
transition
The Authority expects to take steps to
improve its capability as sponsor of
Sellafield Limited to help realise the
expected benefits. A related risk is
that Sellafield Limited is unable to
incentivise the strategic partner and
programme partners in a way that
provides the expected performance
improvements.
As mitigation, the Authority’s contract
management team will support Sellafield
Limited with the procurement and
contractual terms for the strategic
partner, and the Authority and
Sellafield Limited will seek the support
of the strategic partner with the
development of contractual incentives
for programme partners.
Appendix One
Major projects updated costs and schedules
See Figure 12 on pages 28 to 31.
[copied
and reproduced for non-commercial
purposes only]
_____ about RNA:
★ RNA È l'UNICA realtà che coniuga
resistenza ambientalista Contro le
produttività NOCIVE con la messa in
discussione del modello di produzione
borghese e dei rapporti di forza
Capitale-Salario. ★ Dal 24 Settembre
2009: Questo è il taglio e la
motivazione RIGIDA e COERENTE che
DETERMINA ogni nostra "AZIONE", scelta
di Priorità, pubblicazione,
"condivisione" o presa di posizione.
►Nuclear,
Uranium Mining and Enrichment Services, THE MAP OF RUSSIAN
IMPERIALISM.
★Questa
mappa è aggiornata soltanto al 2010. La fonte è la stessa
Rosatom. La Mappa non considera le trattative in atto per la
nuclearizzazione dell'URUGUAY, del Venezuela, Bolivia,
Tunisia e dei recenti accordi in Centrafrica, Medio Oriente,
India ed Indonesia.
LE POLYGONE DE TIR DE QUIRRA – SARDAIGNE.
Le thorium comme l’uranium a une double toxicité: chimique,
comme tous les métaux lourds et radiotoxique. Cette toxicité
liée à sa radioactivité est très élevée, bien au delà du
plus grand toxique que nous connaissons c’est à dire le
plutonium. La limite annuelle d’incorporation du plutonium
est de 300 Bq/an alors que celle du thorium est de 90 Bq/an!
Il s’y ajoute de plus la toxicité propre de ses descendants. Sa
migration dans le sol est très différente de l’oxyde
d’uranium car le thorium est très peu soluble dans l’eau...
The distribution and the contamination level
of uranium (U) and thorium (Th) radionuclides and
potentially toxic metals, Cu, Li, Mn, Sr, and Zn were
investigated in surface sediments from aquifer systems
around a uranium industrial site in the northern Guangdong
Province, China. __________________________________
The city of West Chicago is asking for public
feedback on its request for a $200,000 EPA environmental
cleanup project to remove hazardous waste — including "radioactive
contaminants related to thorium mill tailings" __________________________________
By Gordon Edwards. Thorium reactors. "Thorium
cycle" is a very dirty and dangerous business. __________________________________
International NEWS,
FACT and CHRONICLES that "2.0 people" use to ignore,
everyday. MARCH 2015 - Vol1
☢ ☢ ☢ More than 450
nuclear safety incidents reported at Britain's Royal
Navy submarine base
[The Mirror UK]
☢ Historian: Radioactive waste was stored at
ordnance works in Lycoming County during World War
II
[PennLive]
☢ Justice Department Surpasses $2 Billion in
Awards Under the Radiation Exposure Compensation Act
Washington, DC - The Justice Department announced
that it has awarded more than $2 billion in
compassionate compensation to eligible claimants
under the Radiation Exposure Compensation Act
[US Justice Department - IN]
☢ ☢ ☢ Railway proposes sending radioactive waste
through Corinth
[Post Star]
☢ ☢ Marianas Variety - Marshall Islanders mark
Nuclear Day in Majuro
[Marianas Variety]
☢ ☢ Nuclear reactor control room at Sizewell A
shut down
[ITV]
☢ Public hearing Tuesday on Plant Vogtle permit
to release water to Savannah River
[Augusta Chronicles]
☢ U.S. researchers criticize Japanese gov't for
pressure over history textbook -
毎日新聞
[mainichi.jp]
☢ 'We want to buy Japanese nuclear reactors':
Iran atomic energy official - 毎日新聞
[mainichi.jp]
☢ Purification of contaminated water to be
delayed by a year at Fukushima plant
[mainichi.jp]
LIVESTREAM LINK FOR Helen Mary Caldicott's
SYMPOSIUM IN NYC ON FEB. 28TH-MAR 1ST!
[Helen Caldicott Foundation]
☢ Activists slam Taipower’s nuclear waste plan
[Taipei Times - Taiwan News]
☢ Britain's nuclear weapons base suffers from
'serious' nuclear safety incidents and 'poor safety
culture'
[The Indipendent]
☢ Faulty pipe forces French nuke plant to shut
down
France's oldest nuclear plant at Fessenheim had
to be shut down at the weekend due to a defected
pipe, authorities said. Activists have long
campaigned for the plant's permanent closure due to
its age.
[The Local.Fr]
☢ Victims impact under scrutiny during
anniversary of Marshalls nuclear test
[RADIO AUSTRALIA]
☢ Japan Political Pulse: Speaking out against
nuclear power
[mainichi.jp]
☢ Fukushima Leak Went Unreported For 10 Months,
According to New Report
[care2.com]
☢ Nuclear Regulation Authority shifts disaster
focus to treating minor radiation exposure
[mainichi.jp]
☢ Lifting of Monju operation ban uncertain
A senior official of Japan's Nuclear Regulation
Authority's secretariat has indicated that he has no
idea when it can lift an effective ban on test runs
for the prototype fast-breeder reactor Monju.
[NHK WORLD News]
☢ “As a mom, I don’t want my kids in a creek with
Thorium in it like that.”
[CBS S. Louis]
☢ French nuclear decline exposed as Areva
confronts cash crunch
[South China Morning Post]
BUSINESS AND TRUE-FACE OF CAPITALISM/IMPERIALISM:
☢ Russia's Expanding Navy to Receive 50 More
Vessels This Year
[The Moscow Times]
☢ Russia to construct Egypt’s first nuclear power
plant
Russian President Vladimir Putin and his Egyptian
counterpart announced in early February that the two
countries plan to jointly build Egypt's first
nuclear power plant, as well as boost trade
relations and investments. Source: RIA Novosti/Mihail
Medzel
[Russia & India Report]
☢ Chinese resume talks for Cernavoda nuclear
plant investment
The investor selected for the development of the
units 3 and 4 of CNE Cernavoda is China General
Nuclear Power Corporation (CGN).
[BR - Business Review - Romania's Premier
Business Magazine]
☢ Thorium: $438 Million in Funds Headed for
Contaminated Site Cleanups in New Jersey from Major
Bankruptcy Court Settlement
[EPA - United States Environmental Protection
Agency]
☢ 'We want to buy Japanese nuclear reactors':
Iran atomic energy official - 毎日新聞
[mainichi.jp]
☢ Putin: The construction of the Belarusian
nuclear station stays on schedule
[Belarusian News]
☢ PressTV-Iran, Russia plan nuclear fuel
production
[PressTV-Iran]
☢ Hungary Classifies Russian Nuclear Deal for 30
Years Amid Outcry
[Bloomberg]
__________________________________
RNAnews Facebook
Social page . Nuclear News in Italiano
- Marzo 2015 Vol.1
In Cina la produzione eolica
supera quella da nucleare
[qualenergia.it]
☢ Nucleare, dopo 30 anni cambiano le regole. A
scriverle sono gli industriali
[Il Fatto Quotidiano]
☢ ☢ Nucleare top secret. L’ultima trovata della
coppia Orban-Putin
Viktor Orban ha deciso di coprire con il segreto
di Stato l’accordo con la Russia per lo sviluppo
della centrale nucleare di Paks a sud di Budapest.
La legge voluta dal premier magiaro e approvata
dalla sua larga maggioranza in Parlamento protegger
à
per trent’anni ogni informazione sulla tecnologia
impiegata e sugli investimenti economici di un
progetto nel quale la Russia di Vladimir Putin
investirà dieci miliardi di euro sui 12,5 miliardi
complessivi.
[Il Sole 24 Ore]
☢ Pakistan, colonialismo. Nuovo reattore nucleare
cinese nei pressi di Karachi
[Italnews]
☢ Nucleare, crisi nera per Areva. Perdite per 4,9
mld di euro
[TV-Euronews]
☢ ☢ Putin vola al Cairo: la Russia costruirà la
prima centrale nucleare in Egitto - BUSINESS
[RAINEWS]
☢ ☢ Fessenheim, spenta centrale.
[RSI.CH]
☢ Piacenza: Bonaccini: "No al deposito di scorie
nucleari. Caorso ha già dato"
[Piacenza24.EU]
☢ Poiatica, si indaga sulla radioattività della
discarica. Iren: "E' tutto in regola"
[4minuti.it]
☢ ☢ GB, un secolo per smantellare il sito di
Sellafield
Secondo la Corte dei Conti inglese, saranno
necessari 73 miliardi di euro e 105 anni per
completare i lavori nell'immenso cantiere.
[Valori.IT]
☢ Chiusura centrale Mühleberg: BKW informa
popolazione
I lavori che dureranno 15 anni e a cui
parteciperanno mediamente 200 specialisti.
L'operazione dovrebbe costare circa 800 milioni di
franchi, di cui poco più della metà verrà dal fondo
per la disattivazione degli impianti nucleari. Il
progetto deve ancora ottenere il via libera delle
autorità.
[SWISSINFO]
Events: GUARDA QUI
LA
VERSIONE COMPLETA DEL FILM "MATERIA OSCURA" di Massimo D'Anolfi
e Martina Parenti - proiettato durante il Chernobyl Day di
Vasto e trasmesso in diretta streaming da RNAnews e qualche
settimana dopo trasmesso in chiaro anche da RAI5
(disponibile ora anche su youtube):
__________________________________ NEWS
THAT YOU NEED TO KNOW:
$224 million to
be paid to EPA for clean-up of thorium contamination at the
Welsbach Superfund Site in Gloucester, NJ. Daily Herald. A former Kerr-McGee
gaslight mantle factory in West Chicago became notorious in
the 1990s for burying radioactive thorium, and the
contamination spread to houses and school yards,
Reed-Keppler Park, a sewage treatment plant, Kress Creek and
the West Branch of the DuPage River.. Read More
HERE.