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The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Yesterday the DTI and BNFL reached an agreement with the US Department of Energy (DoE) on BNFL Inc.'s loss-making contracts at the East Tennessee technology park and the advanced mixed waste treatment plant in Idaho.
Under the terms of the deal the Idaho facility will transfer from BNFL Inc. to US DoE ownership in May and is subject to BNFL Inc. meeting a number of preconditions, which the board are confident of achieving.
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Agreement has also been reached on a defined date for the completion of the East Tennessee contract and the expedited settlement of numerous outstanding claims on both contracts. As a result BNFL Inc. will receive between $500 million and $550 million from DoE once the Idaho facility transfers.
The deal provides real benefits to both BNFL and DoE. In addition to the immediate cash receipts, BNFL will eliminate its considerable exposure to further losses on these contracts while DoE will be able to pursue its overall clean-up programme more effectively. Both sides have avoided a protracted, costly and uncertain legal dispute over the outstanding claims.
The agreement also enables the fulfilment of one of the main recommendations of the 2003 joint strategy review of BNFL (the results of which I announced to the House on 11 December 2003, Official Report, columns 9293WS). The elimination of the ongoing risk will enable BNFL Inc. to refocus on pursuing lower-risk opportunities in line with that strategy. BNFL Inc. is a wholly owned US subsidiary of BNFL.