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Government to Net Pounds 100m From Sale of British Nuclear Group

Posted on: Monday, 12 September 2005, 06:00 CDT

The Government has decided to sell off British Nuclear Group, the state- owned body with the job of cleaning up most of the UK's civil nuclear sites, including the Sellafield waste reprocessing plant in Cumbria.

The sale is likely to be carried out in the middle of next year and is expected to raise around pounds 100m. The business will be sold to a trade buyer with a number of American, British and Continental companies expected to enter the bidding.

British Nuclear Group (BNG) is the business spun out of British Nuclear Fuels following the transfer of all BNFL's assets and its pounds 48bn in liabilities to the new Nuclear Decommissioning Authority. It has 15,000 staff and its chief executive is a former BNFL director, Lawrie Haynes.

Initially, BNG will have legacy contracts to manage and begin the clean up of BNFL's 14 sites which include Britain's Magnox nuclear stations as well as the Sellafield complex.

Most of these legacy contracts will run for three years before they are put out to competitive tender. But in the case of Sellafield, which could cost as much as pounds 40bn to clean up, BNG will have up to four years before facing competition for the contract. Among those expected to bid for the contracts are the American companies Fluor, Bechtel and Washington Group, the UK engineering contractor Amec and Serco, the support services company. Cogema, the state-owned French nuclear company is also likely to bid.

These same companies are likely to be amongst the bidders for BNG. The Nuclear Decommissioning Authority has not said what the value of the clean- up contracts will be. Initially BNG will earn an annual fee based on the work it does. BNFL has already announced the sale of its US subsidiary Westinghouse, which designs reactors and fabricates nuclear fuel. Up to 15 bidders are thought likely to submit offers and the deal, due to be announced by the end of the year, could raise pounds 1bn.

Once Westinghouse and BNG have been sold, BNFL is likely to be wound up. Apart from its engineering division Nexia, the only asset left in BNFL will be its one-third stake in Urenco, a uranium enrichment business owned jointly with the Germans and the Dutch based at Capenhurst near Chester.

Source: Independent, The; London (UK)

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