UK lawmakers criticise management of Sellafield nuclear site

Mon Feb 10, 2014 7:01pm EST

* Committee criticises group for costs, delays, expensive staff

* Sellafield owner NDA must terminate contract if no improvement

* Sellafield cleanup to cost more than 70 billion pounds

LONDON, Feb 11 (Reuters) - The management of Britain's nuclear site at Sellafield in northern England is spending too much money and its contract should be cancelled if it does not improve, Britain's Committee of Public Accounts said on Tuesday.

The head of the committee, which scrutinises whether taxpayers' money is spent wisely, criticised Sellafield's Nuclear Management Partners (NMP) consortium in a report for huge cost overruns, delays on projects and expensive staff.

NMP, which consists of France's Areva, U.S. firm URS and Britain's Amec, has managed the Sellafield site since 2008 and Britain's Nuclear Decommissioning Authority (NDA), which owns Sellafield, extended the contract for a further five years last October.

Sellafield is the site of Britain's worst nuclear accident in 1957 and was subject to a radiation scare at the end of last month.

NMP oversees Sellafield's activities including the decommissioning of a civil nuclear plant and reprocessing spent nuclear fuel from stations across the world.

"The Nuclear Decommissioning Authority must monitor progress and terminate the contract if NMP's performance does not improve quickly," said Margaret Hodge, chair of the committee and Shadow Minister for Culture and Tourism.

The committee's report showed the cost for cleaning up hazardous waste at Sellafield is expected to rise above 70 billion pounds ($114.8 billion) and that the price tag for another project on the site has nearly doubled.

NMP chairman Tom Zarges said in response to the committee's report that the first five years of the group's contract at Sellafield were "characterised by many successes but also a number of disappointments".

"Our job now is to build on our experience of the last five years to safely and reliably deliver our customer's mission," he said.

The chief executives of URS and Amec told investors in separate conferences last year that their work at Sellafield was "outstanding" and "one of the best government works ever in the history of the UK".

The NDA said on Tuesday that it requires significant improvement from the consortium over the coming five years.

Its chief executive John Clarke told the committee during an evidence session which provided background for the report that performance at Sellafield had not been as good as expected.

He added that it could terminate, if necessary, NMP's contract at any point in time by serving the consortium a 12-months' notice period.

The committee recommended the NDA should set out how it will monitor NMP's performance and the National Audit Office should report on the progress to the committee in October this year.

Hodge also reprimanded NMP for failing to provide strong leadership and staff training.

"There has been a high turnover of executives and NMP has failed to train staff with the right skills and experience," Hodge said, adding that instead it was employing expensive staff at an average salary of 300,000 pounds.

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