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Engineering consortium loses £9bn Sellafield contract as NDA takes back ownership of plant

The government has confirmed it has stripped a consortium of three engineering firms of a £9bn clean-up contract for the Sellafield nuclear power site.

The Nuclear Management Partners (NMP) consortium – made up of Amec, Areva and URS – was initially awarded the decommissioning contract in 2008.

In February 2014, the public accounts committee criticised the spiralling costs of the clean-up work and called on the Nuclear Decommissioning Authority to cancel the contract if performance failed to improve.

The call came in the wake of a damning 2013 report from KPMG into the work, produced shortly before NMP was granted a five-year extension to the contract.

The NDA initially declined to share the findings of the report with the committee of MPs, which ultimately obtained it through a freedom of information request.

Today, the NDA has taken back control of Sellafield, effectively ending the deal with NMP.

NMP general manager Iain Irving said he was “surprised and naturally disappointed” by the decision and highlighted “the considerable progress made at Sellafield” since 2008.

Mr Irving added: “NDA has made it very clear that it is the contractual model that it is being revised and has acknowledged the progress made by NMP over the last six years.

“Accordingly, we would like to highlight that since the NDA extended our contract to lead Sellafield Ltd in October 2013, extensive progress has been achieved by NMP and the site licence company, of which we are extremely proud. 

“Also, the last 12 months have seen some of the site’s highest levels of performance, while over the last two years we have consecutively achieved the site’s best overall safety records. 

“During NMP’s tenure of the contract, we have achieved savings to the UK taxpayer of more than £650m and have invested around £23m from our fee in west Cumbria, making a real difference to the local community.

“Ultimately, we all share the same goal: the safe and secure operation of the Sellafield site. 

“We will be working closely with the NDA in the light of this decision to determine the way forward and ensure the significant progress and momentum that has been built on site during the last six years continues over the coming year and beyond.”

The NDA will seek a “strategic partner” from the private sector to assist the Sellafield executive team on the work.

The Department of Energy and Climate Change said the arrangement would mirror that taken on other major projects such as Crossrail and the 2012 Olympics.

Energy secretary Ed Davey said: “Sellafield is the biggest and most complex nuclear site in Europe, so it’s right that we keep the way it’s being managed under constant review.

“We have seen great examples of how this approach can work with Crossrail and the Olympics – and I’m confident we’ll see similar results at Sellafield.”

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