Watchdog Criticises NDA Magnox Contract That Cost Public £122 Million

By David Dalton
11 October 2017

11 Oct (NucNet): Ministers must confront “fundamental failures” by the UK’s nuclear decommissioning body that have caused the loss of at least £122m (€136m, $161m) of taxpayers’ money, the public spending watchdog has said. The National Audit Office (NAO) said the Nuclear Decommissioning Authority had bunged a £6.2bn contract — one of the largest awarded by the UK government — to dismantle 12 Magnox nuclear sites and criticised the government’s oversight of the deal. The business department, led by Greg Clark, knew for two years that changes to the contract would have significant cost implications, but did not make itself sufficiently aware of the scale of budget overruns, the NAO said in a report. Mr Clark announced in March 2017 that the government was terminating its contract with Cavendish Fluor Partnership, a joint venture between UK-based Babcock International and Fluor of the US, and launched an independent inquiry into the “defective procurement”. The cost of cancelling the 14-year contract was estimated at the time to be about £100m but the NAO said on 11 October 2017 that the figure was upwards of £122m. This included £97.3m of settlements with US groups Energy Solutions and Bechtel, the losing bidders for the Magnox contract, after a High Court ruling that the NDA had mishandled the tender process. A further £13.8m was spent on legal fees and £10.8m of staff time was used, according to the NAO. The contract collapsed after the projected cost of decommissioning the Magnox sites – Britain’s first generation of nuclear reactors – increased from £3.8bn to £6bn because of factors such as higher-than-expected volumes of radioactive waste. This undermined the economics of the deal for the winning bidder and exposed the NDA to a legal challenge from the losers on the basis that the tender process was faulty. Details online:

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