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Construction experts warn of nuclear contractor job losses

Nuclear construction leaders have insisted a 2019 completion date is achievable for Hinkley Point C, but warned that delays to the programme could lead to job losses among contractors.

Giving evidence to the Energy and Climate Change Committee, Institution of Mechanical Engineers head of energy and environment Dr Tim Fox said a 2019 completion date with a six-year construction programme was achievable.

But CECA director of external affairs Alasdair Reisner warned the committee that the impact of the delay on new nuclear is “palpable”.

Mr Reisner said companies were having to justify employing staff solely for the nuclear sector to their boards at a time when work was not picking up and that “companies are taking a view on whether they can sustain jobs” in the sector.

Dr Fox said: “Inevitably things go wrong on [major construction projects].

“However, with the amount of time and planning put in, hopefully [there are] sufficient contingency provisions to get around that and 2019 has the potential to be achieved.”

The select committee heard during its evidence session – Building New Nuclear: The Challenges Ahead – that continuing slippage on the nuclear new-build programme was contributing to a fall in confidence within the industry.

EDF Energy awarded Laing O’Rourke and Bouygues a contract worth around £2 billion for the main civils deal at Hinkley Point C in June.

But contracts have been delayed at the site, including the £100m earthworks deal for Bam Nuttall and Kier, with EDF and Centrica due to announce their final investment decision for the project before the end of 2012.

Mr Reisner also insisted that contractors are trying to reduce levels of subcontractors down the supply chain within the new nuclear sector, but that where subcontractors are going to be employed they need to be “brought in long before going out onsite”.

He said: “That’s when you can do your behavioural work so that people understand this is not building a car park… this is building a nuclear plant.”

The select committee heard from Mr Fox, Mr Reisner, CITB-ConstructionSkills skills strategy director Steve Geary and Institution of Civil Engineers fellow John Earp. The hearing covered skills, financing nuclear plants and nuclear safety.

Mr Earp said that a six-year construction timetable is “do-able” and that it was being applied elsewhere around the world.

Mr Reisner also said that the industry needed to be constantly challenged to make sure lessons learned from previous projects and the Fukushima disaster are at the forefront of people’s minds.

Mr Geary called for greater flexibility in funding skills programmes, while Mr Fox warned that it was “less important” to achieve a 2019 completion date for Hinkley Point C than it was to “make sure we set off on a journey in a well-prepared and co-ordinated fashion”.

Mr Fox added that delays or reworking projects could lead to substantially increasing costs.

“It would be better advised to do the preparation and groundwork now than to focus entirely on the 2019 date,” he warned.

CN reported in May that talks had begun between the Department of Energy and Climate Change and EDF Energy/Centrica to ensure an investment decision on Hinkley Point C is not delayed.

The talks centre on guaranteed return of investment mechanisms for the nuclear developers called contracts for difference, for which rates are not set to be finalised until 2013 – and not available to generators until 2014.

The government has invited developers with pressing final investment decisions to come forward ahead of the 2013 announcement.


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