By a 2004 order of the British Government’s Department of Trade and Industry, the Nuclear Decommissioning Authority (NDA) came into existence on Friday April 1st, and ownership of the UK’s main nuclear sites, including Sellafield and Dounreay were passed into the new organsation. It will now be the NDA’s job to contract out clean-up operations for those sites at the most cost effective dividend for UK taxpayers

Many facilities at these sites, most notably Sellafield—where Britain’s post war effort to develop the bomb began—are approaching the end of their engineered life spans, and cannot simply be knocked down. They must be meticulously decommissioned, a processes that has already started at many of Sellafield’s aging sites and is a process that could take some 100 years.

The Windscale AGR, or "Golf Ball," reactor.

Nils Båhmer/Bellona

A recent visit to Sellafield by Bellona revealed that measures were already underway to decommission these sites. The Windscale AGR reactor—known to plant workers as the “Golf Ball” for its distinctive dome-shaped outer bio-shield—came on line in 1962 and was shut down in 1981. It is the centerpiece of the UK Atomic Energy Authority’s (UKAEA’s) decommissioning efforts. The last parts of the reactors core were removed in 2003 but the entire decommissioning process will not be completed until 2130, when radioactivity levels are sufficiently low to dismantle its remain support structures. Current decommissioning cost estimates lie at some £80m.

A cooling tower at Sellafield's Calder Hall site.

Nils Båhmer/Bellona

The waste will be stored in these prospective storage sites until it can be permanently interred in a geologic repository, though no country on earth is currently running such a facility.

The birth of the NDA
The Government’s solution to the problem has been to create the West-Cumbria based NDA, which came into existence on April 1.

Ownership of the UK’s main nuclear sites, including Sellafield and Dounreay, will pass to the new organisation. It will be the NDA’s job to hand out contracts to clean up those sites, at the best possible price and with the highest safety standards and technology.

One of the companies that will be bidding for those contracts is British Nuclear Group (BNG), a newly formed subsidiary of British Nuclear Fuels (BNFL). The idea is that the by introducing competition for the clean-up contracts, the work will be done more quickly have a lower end cost.

So why does British Nuclear Fuels need such an overhaul? BNG’s chief executive Lawrie Haynes, in a recent interview with the London Times, said that forming a new subsidiary in the form of BNG was necessary to create a clear focus for the group. A recent visit by Bellona to the Sellafield site, where decommissioning efforts at several key installations within the sprawling complex are already underway, showed that theory has been put into practice.

“We have to show that we can turn ourselves around from being an owner of the assets, to being a contractor with a customer to serve,” said Haynes, “The whole point was to get away from the idea that we are the owner and we will do it at our pace. The NDA requires a fundamental change in the attitudes of the business.”

By 2008, half of Britain’s 18 nuclear sites will be put out to competition. However, it will be at least four more years before Haynes’s BNG will have to compete with rivals for the job of cleaning up Sellafield.

But is it worth all the expense and upheaval? “I have absolutely no doubt,” Haynes said. “Just the threat of the NDA arriving brought about a huge change. The onset of competition has focused a lot of people on delivery. Our innovation units are a direct response.”

Nonetheless, the wind-down of work will be slow and cost several thousand of the 12,000 jobs at the Sellafield site over the next 10 years. The Government has pledged massive support to the West Cumbria area, where Sellafield is situated, after the NDA begins work.

Cleaning up the nuclear industry’s many sites will cost about £50 billion. But Haynes said that if the programme, which would take about 100 years, could be reduced by even 10 percent, it would add up to a saving of £5 billion pounds. The savings, he said, would start small but add up over the years, and said that some the clear targets he has set will come immediately

For example, BNG—which sub-contracts to many companies including Fluor, Jacobs and Amec—wants to reduce supply-chain costs by about 30 per cent. That will result in a saving of £45 million this year and £75 million next year.

One big change looming for BNG is that in future it will work with some big private-sector names as partners rather than as suppliers. There are good reasons for this. For instance, BNG wants to tap into the experience in the US, where decommissioning has been under way for about 15 years.

The US spent $150 billion (£80 billion) on its clean-up and Haynes said that it is debatable whether or not good value was obtained from it.

BNG has assessed its own skills and looked at those of its suppliers, which on Friday became both rivals and potential partners.

BNG is holding conversations with the likes of Serco, Lockheed, Bechtel, WGI, Fluor, and Jacobs about becoming partners at the so-called Tier 2 level, Haynes said.

In months to come it will have discussions about partnerships at the Tier 1 level. Those partnerships are likely to be revenue-sharing joint ventures. Down the line, special-purpose robotic clean-up vehicles may be set up to win contracts for specific sites, such as Sellafield and Dounreay. Indeed Sellafield is already making use of much robotic technology.

But the arrival of the NDA has been blighted by a row over state help to Sellafield owner BNFL. The European Commission (EC) called into doubt a proposed £40bn transfer of liabilities from BNFL to the NDA.

Specifics of company structure at Sellafield and employment arrangements
According to documents furnished to Bellona Web by BNFL, a new holding company for the BNFL group will retain the name of British Nuclear Fuels plc—that is, BNFL. Four other BNFL subsidiaries that were launched as registered companies on Friday were BNG, which was established to hold the shares in British Nuclear Group Sellafield and Magnox Electric LTD; BNG Project Services Ltd; Nexia Solutions Ltd, and Energy Sales and Trading Ltd.

Westinghouse was also retained and will be used as the brand identity for Westinghouse Electric UK Ltd, which has been established as a BNFL group subsidiary to hold the shares in Springfield Fuels Ltd.

The BNFL Group parent company will manage corporate governance and shareholder relations, establish company policy, top level performance indicators and provide mandatory plc oversight functions.

Site management companies (SMCs) will be those companies that win NDA contracts to operate UK nuclear sites and provide a leadership team for the contract’s duration. BNFL, as of Friday, has two SMCs operating in the UK: British Nuclear Group Limited and Westinghouse Electric Limited.

Site licensing companies (SLCs) will be those companies holding a licence, issued by Britain’s Nuclear Installations Inspectorate, to operate a particular site. The SLC will also hold environmental authorisations from the UK’s environment Agency and the Scottish Environment Protection Agency. Any given SLC will operate under the same identification as the SMC.

As of Friday, three SLCs were established as Tier 1 companies: BNG Sellafield Ltd; Magnox Electric Ltd, and Springfield Electric Ltd.

Tier 2 companies with no operate under contract from the NDA but rather will provide services to the SLC’s and elsewhere, as subcontractors. These companies include: BNG Projects Ltd; Uranium Asset Management limited, which is the uranium transport supply to Springfield Fuels, and Nexia Solutions. Nexia solutions, however will also operate as a Tier 1 business, for example, in managing and operating the BNFL Technology Centre at Sellafield.

An important feature of the SMC/SLC model, according to BNFL officials, is that it allows both Westinghouse and BNG to transfer its employees to provide skills within the SLCs. BNG intends to use secondments for this purpose. Key employees seconded from an SMC to an SLC would then be returned to the SMC at the end of contract, thus retaining skill and expertise in BNG, which is a crucilal element of the company’s future competitiveness.

The Windscale AGR (left)and the tower of Pile 1.

Nis Bøhmer/Bellona

But an interview with Derek Simpson, general secretary of the Amicus trade union that that Sellafield workers belong to predicted higher long term layoffs in an interview with the BBC, from a current 12,000 permanent staff members to 4000 by 2011.

Amicus has also called for permanent staff to be retrained to carry out the decommissioning work and plans to oppose the outsourcing of any core work.

"We need to maximise the number of job opportunities available through the decommissioning process by re-skilling Sellafield workers,” he told the BBC.

"Unless we start training people now, we are in danger of damaging the whole of UK manufacturing and disadvantaging Sellafield workers and the whole Cumbrian economy. Amicus is committed to maintaining our members' terms and conditions at Sellafield—ensuring that pay and pensions provision are not threatened by the outsourcing of work."

The government has pledged to create "high quality jobs" to replace those lost during and after the decommissioning process at Sellafield the BBC reported.

Bellona Web interviews on the ground with BNG workers on the Sellafield site confirmed that they viewed the coming of the NDA as more a cosmetic and management related than ground shifting. But if Amicus’ Stimpson is correct, the bulk of these workers will face unemployment lines unless drastic measures are taken.

BNG public relations officer Stagg, a BNFL veteran of more than two decades, was not so sure how the employment situation would change.

“Certainly, I hope that BNG will remain among the main contractors at Sellafield for continuity’s sake,” he said. He envisioned a situation after 2008 in which several contractors would be bidding and eventually working on various decommissioning projects “but whether these contractors will be on site will be at the discretion of the NDA.”