Press release

Future management of Sellafield announcement

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

New, simplified management arrangements to be introduced at Sellafield to ensure the long-term success of the clean-up programme.

New, simplified management arrangements will be introduced at Sellafield to ensure the long-term success of the clean-up programme at the Cumbrian site, the government announced today.

After a year-long review of the options, the Nuclear Decommissioning Authority (NDA) has concluded that simplifying the relationship between the NDA and Sellafield Ltd will bring greater clarity and focus on achieving progress and value for money.

The new arrangements will build on the success of the approach taken to complex infrastructure projects such as London’s Crossrail and the Olympics.

Ed Davey, Secretary of State for Energy and Climate Change, said “Sellafield is the biggest and most complex nuclear site in Europe, so it’s right that we keep the way it’s being managed under constant review. We have seen great examples of how this approach can work with Crossrail and the Olympics – and I’m confident we’ll see similar results at Sellafield.”

John Clarke, NDA’s CEO, said: “This decision is the result of careful consideration and review of various commercial approaches in use where the combination of public and private sector comes together to deliver complex programmes and taxpayer value.

“I believe we can build on progress to date and drive further improvements in performance and value for money by enhancing the capability of the Site Licensed Company (Sellafield Ltd) through a different approach.”

In the new arrangements, ownership of Sellafield Ltd reverts to the NDA from Nuclear Management Partners, the consortium that took control of Sellafield Ltd under contract to NDA in 2008.

The Sellafield Ltd Board will continue to consist of existing non-executive directors and key members of the current executive team, but over time will now also see the introduction of NDA appointed directors.

Reporting to this Board will be the Sellafield Ltd executive team which will continue to have day-to-day management responsibilities for the site.

The NDA’s recommendation is fully supported by DECC and the NDA anticipates the full co-operation of Nuclear Management Partners during the transition to new arrangements over the next 12-15 months.

A key feature of the new arrangements is for a “strategic partner” to be sought from the private sector to advise and assist the Sellafield Ltd executive team in the work necessary to take an overview of all site activities – these arrangements are similar to those successfully put in place by London’s Crossrail.

This means the private sector becomes a supplier to the Site Licensed Company (Sellafield Ltd) rather than a parent of it. Engagement with the supply chain at all levels will remain central to this new approach and key programmes of work will continue to be competitively let to the private sector.

The continued safe operation of the Sellafield site is paramount, and the NDA will continue to work closely with the Sellafield Ltd Managing Director and Executive team throughout this process. During this transition period NDA and Sellafield Ltd will engage with the Sellafield workforce, their trade unions, the regulators and other key stakeholders to ensure they are fully aware of the proposed structure and how it will be implemented.

Notes to editors

  • Sellafield consumes 60% of the NDA’s £3 billion annual budget and houses the vast majority of the UK’s civil nuclear waste. It also has commercial operating plants that support significant NDA income alongside historic waste stores and an enormous construction programme, all sharing an ageing infrastructure.
  • Sellafield Ltd is the Site Licensed Company that operates the Sellafield site under contract to the NDA.
  • Nuclear Management Partners is the consortium (comprising of AECOM, Amec Foster Wheeler and AREVA) that won the competition to become the Parent Body Organisation for Sellafield Ltd in 2008 for up to 17 years.
  • The existing model continues to work well elsewhere in the NDA’s estate where the challenges are better understood and suitable contracts have been developed:
    • A target cost contract at Dounreay is being delivered in line with all key milestones, whilst additional scope has been added that will see the site reach fuel free status decades sooner than assumed and deliver £1 billion of savings to the taxpayer
    • A similar contract recently let for the 12 sites in the Magnox/RSRL competition has potential savings of over £1 billion to be delivered as all sites are progressively decommissioned
    • We are now in the second five-year term of a cost reimbursable contract for the management of Low Level Waste arising from our estate and beyond, with 85% of waste now being diverted from the repository at a saving of £2 billion