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EDF could still 'walk away' from nuclear, says Kier CEO

The long-awaited enabling works at Hinkley Point C look set to start in January – but EDF could still ‘walk away’ unless the government makes a clear stand on nuclear, Kier’s chief executive said today.

Speaking to CN after the firm posted a rise in profits for 2011/12 year, Paul Sheffield said: “We are underway with the design work, it’s due to start in January, physically in the ground.

“But I think EDF have not yet made their final investment decision and I think it will hinge on the electricity market reform bill that the government is working on at the moment and is expected to be lodged in the autumn some time.”

Kier and Bam Nuttall have been appointed to contracts for preliminary works and earthworks in deals worth in excess of £100 million. Laing O’Rourke and Bouygues are preferred bidders for the main civils work, worth more than £2 billion, with contracts due to be signed next year.

The contract was first reported as being delayed in May, but Kier now expects to start work following EDF Energy and Centrica’s final investment decision later this year.

Kier reported a construction margin of 2.5 per cent and a rise in property profits today, but incurred £5m of redundancy costs after a dip in local authority maintenance work.

Mr Sheffield said the EMR process, which CN reported in May is the subject of negotiations between the government and the energy giant, should then start signal ‘where the government is coming from in terms of nuclear power’.

“I think it’s not until that has been clarified that EDF will make a final investment decision on whether that will go ahead,“ he added. Asked if he is confident of the process moving forward, he added: “It’s difficult to say. I’m disappointed it’s taken so long to get to where we are but it’s no surprise.

“I would like them to agree and for everything to move ahead with pace, but if it does not and EDF were to walk away, there would be a pretty rapid shift to build gas, biomass and coal stations. Either way it’s not bad news for the industry; we desperately need power and power needs people to build big infrastructure projects. Either way there’s light at the end of the tunnel.”

Mr Sheffield added: “If EDF do go ahead then the next one to watch is the sale of Horizon. I think the hot tip is on the Chinese getting a piece of the action there.”

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