The latest toxic progress on the great nuclear decommissioning mess

The now decommissioned Bradwell nuclear power station – the first one to be safeguarded

Full report on the scandal still not published as top officials try to avoid blame for the fiasco

Just over two years ago this site carried a blog post with Byline Times on one of the biggest and most incompetent contracts ever made in Whitehall by the Nuclear Decommissioning Authority.(NDA) The £6.2 billion contract to the Texas company Cavendish Fluor Partnerships ended up in the courts where it was successfully challenged by rivals Energy Solutions including Bechtel who won £97m compensation on the grounds that the contract had been awarded illegally.

The contract was to clean up and make safe 10 ageing Magnox nuclear power stations and two research facilities at enormous cost to the taxpayer. It is part of a long term decommissioning programme which will eventually cost the taxpayer a staggering £132 billion and not be finally completed until 2140 long after anybody reading this ( and me) will have died.

At the time Sir Amyas Morse, then comptroller and auditor general , said “The NDA’s fundamental failures in the Magnox contract procurement raise serious questions about its understanding of procurement regulations; its ability to manage large, complex procurements; and why the errors detected by the High Court judgement were not identified earlier.”

Not a pretty picture

Now two years on the National Audit Office and MPs on the Public Accounts Committee have looked at what has happened. And the saga is continuing with not altogether a pretty picture. And the final report was held up by legal action from the NDA’s former senior management team.

The result of the first court case meant that the NDA shortened the contract and it finished last year.

The cost of doing this was to ratchet up another £20 million bill for the taxpayer to avoid yet more litigation this time from the contractor. This took the extra cost to the taxpayer to £140m.

Then the cost of the whole project of decommissioning the power stations has gone up yet again. From an estimated £6.2 billion to anything from £6.9 billion to £8.7 billion. The reason is that the Nuclear Decommissioning Authority don’t know the real state of all the sites. And it is obvious that there is a huge amount asbestos on the sites are a major problems.

And they haven’t been very good at making sure the contractor did a good good job. One defective performance notice on Bradwell nuclear power station had to be issued three times before it was correct- and then it was too late as it came during the month the contract finished. In the end the contractor agreed a post contract payment cutting £2.98 million from its bill. Bradwell was the first to move to a ” care and maintenance ” contract in 2018.

Management has been strengthened since the fiasco with new people brought in. New state companies have been set up to deal with decommissioning. But we won’t know the complete story of the debacle until the final report from Steve Holliday, the former head of the national grid, reveals what happened and who is to blame.

He has issued a bland interim report but publication of the final report was hit by yet more legal action.

Inquiry chief insists he will investigate top management and ministers

Mr Holliday concludes in his interim report: “

“I will further investigate whether the actions of individuals within the NDA , and those of government officials and ministers, were consistent with the standards expected of them, including relevant codes of conduct.
“I will continue to investigate whether decision makers (individuals, including government officials and ministers or boards) had the necessary information to make those decisions and, if not, why not. This will cover decision making at all stages of the matters covered by the terms of reference, including the procurement, the litigation and the matters leading to the termination for convenience.”

This led to five officials – John Clarke. the former NDA chief executive; Stephen Henwood, the former chairman; Robert Higgins, the former head of legal services; Mr Graeme Rankin, former head of competition and Mr Sean Balmer, former commercial director, to go to court to seek a judicial review into Mr Holliday’s inquiry.

Each had been notified they could be subject to criticism by Mr Holliday and were alarmed it could affect their reputations and livelihoods.

They claimed they had all had their human rights breached by Mr Holliday unlawfully delegating work and criticisms of them to his staff; hadn’t disclosed all the material to them and prevented them from sharing information while making representations to him.

Judicial review dismissed

On Christmas Eve last year the judge Mr Justice Murray dismissed the ” arguable” case over the delegation of work and all the other grounds. It was pointed out that there are 2.5 million documents in the case and Mr Holliday could hardly be expected to read every one.

The result is that we still have no final report nearly a year after the court decision suggesting that wrangling is still continuing. As MPs on the public accounts committee point out :”Implementing the recommendations of the Holliday inquiry into the Magnox contract and the Department’s ‘Tailored Review’ of the role of the NDA will be critical and the publication of these reports cannot come soon enough.”

Nuclear decommissioning: How Whitehall turned toxic waste into a dirty mess

wylfa nuclear power station

Decommissioned power station at Wylfa in Anglesey

CROSS POSTED ON BYLINE.COM

It is possibly Whitehall’s biggest blunder. it certainly involves one of the biggest contracts ever let by government. And you will have shelled out hundreds of millions of pounds for very little in return.

The subject is the decommissioning of 10 nuclear power stations and two research centres – now all past their sell by date – and all leaving the taxpayer with an almighty bill to detoxify them and make them safe.

The total bill to do this was meant to be £3.8 billion but it turned out to do it properly would cost £6.2 billion- making it possibly one of the biggest contracts ever let by Whitehall.

And what a mess Whitehall civil servants and their ministers made of it. The whole sorry story was revealed in a report by Parliament’s financial watchdog, the National Audit Office, this month.

. The  £6.2 billion contract was approved by the Treasury because it promised to save taxpayers £904m by loading risks on the contractors. Instead it has only saved £255m and this has been partly wiped out by a botched tendering procurement which ended up with a rival consortia being able to sue the government for damages.

The company that won – an American led consortium Cavendish Fluor Partnership (CFP) based in Texas- was awarded the contract illegally.

We know this because its rivals Energy Solutions which includes Bechtel successfully sued  the government in the High Court last year and the High Court ruled that Fluor should have been disqualified because the final contract was nothing like the one put out to tender.The Business, Energy and Industrial Strategy ministry has just settled the bill with Energy Solutions by agreeing to pay then £97.3m in compensation.

But the real bill was even more. The NAO found that the full cost amounted to £122m.  It spent £13.8 million on legal and external advisers. Of this, £3.2 million was spent on the competition and £8.6 million was spent on legal fees in the ensuing litigation. The NDA estimates that in-house staff time has cost £10.8 million. This excludes the cost of staff time of senior central government officials who were heavily involved in decisions, particularly about the National Decommissioning  Authority’s settlement and its decision to terminate the contract.

One reason for this debacle is believe or not is that officials  did  not know the state of some of the decommissioned  power stations so had to revise its estimates as more problems came to light- changing the terms of the winning bidder’s contract.

Amyas Morse, head of the National Audit Office: “The NDA’s fundamental failures in the Magnox contract procurement raise serious questions about its understanding of procurement regulations; its ability to manage large, complex procurements; and why the errors detected by the High Court judgement were not identified earlier.

In light of these issues, the Department must consider whether its governance and oversight arrangements surrounding the NDA are sufficiently clear and effective in providing the scrutiny and assurance it requires to meet the standards expected in managing public money.”

There is now an inquiry going on under Steve Holliday, former chief executive of the National Grid. Its terms of reference include whether disciplinary action should be taken against the civil servants who made such a botched job and cost us even more money. It could mean heads should roll.

And it leaves the government another big problem because the contract with the present consortium has had to be terminated in 2019 – nine years before it is due to end.

And the axe is due to fall just as Brexit comes in – leaving more unfinished business just when Britain may well leave Euratom. What a mess.

I have written about this in Tribune. The full NAO report is here.