UK pays £100m over nuclear clean-up 'debacle'

New tender process to be launched after regulator cancels existing £6.1bn contract nine years early

Business Secretary Greg Clark
Business Secretary Greg Clark
(Image credit: Jack Taylor/Getty)

The government has paid out nearly £100m in compensation over a nuclear "decommissioning debacle" that will bring an existing £6.1bn clean-up project to an early end, reports The Guardian.

In turn, that means the Nuclear Decommissioning Authority now faces "the daunting task of starting a new tendering process" for 12 nuclear power stations that are being cleaned up and closed down.

The government has also launched a review to find out what went wrong, as it faces accusations of "dramatic levels of incompetence" from the Labour Party.

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Business Secretary Greg Clark said: "I am determined that the reasons for [this] should be exposed and understood; that those responsible should properly be held to account; and that it should never happen again."

It follows a ruling in the High Court last year in favour of two US companies, Energy Solutions and Bechtel, who had sought a judicial review after they lost out in the tender process to decommission the 12 sites.

Energy Solutions had managed the sites for 14 years and claimed it only lost out on the contract after a "scoring mechanism had changed late in the process", among other failings.

Yesterday, the two companies were awarded £85m and £12.5m in compensation respectively.

The existing contract with consortium Cavendish Fluor, 65 per cent-owned by engineering group Babcock, is being terminated nine years early because the tender also "underestimated the scale of the decommissioning required.

Cavendish, which ministers stressed has been doing a good job, will continue its work for two years while the tender process is re-run.

Babock said yesterday the contract termination would cost it around £100m a year, which expects to replace this with other "identified" opportunities. Its shares have still tumbled six per cent since the announcement.

Rebecca Long-Bailey, shadow energy secretary, said: "British taxpayers… should be asking themselves not just whether they are willing to put up such ineptitude but also whether the government actually has a well thought out and long term nuclear decommissioning strategy."

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