Examination of Witnesses (Questions 1-19)
MR NORMAN
HARRISON, MR
SANDY MCWHIRTER,
MR MARC
MURRAY AND
DR BETH
TAYLOR
19 JANUARY 2005
Q1 Chairman: Good afternoon.
I am sorry to have kept you; we had a division at four and we
had to wait then to see if there was a second one. Mr Harrison,
could I welcome you and your colleagues to the first public evidence
session on our inquiry into meeting Scotland's future energy needs,
which has arisen in part from the useful and informative visit
we paid to Dounreay in November last year. For the record could
I invite you to introduce your team to the Committee.
Mr Harrison: Yes,
indeed. Thank you very much, Madam Chairman. I will introduce
myself first. My name is Norman Harrison, and I am the Director
of the Dounreay Division of the United Kingdom Atomic Energy Authority.
If I can introduce my team—Sandy—
Mr McWhirter: I am Sandy McWhirter.
I am the Dounreay Programme Manager responsible to Norman as Director.
Dr Taylor: I am Beth Taylor. I
am Head of Communications for UKAEA.
Mr Murray: I am Marc Murray. I
am the Technical Assistant to the Dounreay Director.
Q2 Chairman: Before we
start the detailed questioning do you have anything you would
like to say by way of an introduction?
Mr Harrison: Yes, indeed, Madam
Chairman, I have a brief introduction I would like to make, if
I may. Really the UKAEA today has two main roles. Our main task
is the decommissioning, restoration and regeneration of our former
nuclear sites. In Scotland that is at Dounreay, and in England
at Harwell, Winfrith, and Windscale in West Cumbria. We are also
responsible for the UK's fusion research programme. Decommissioning
a site like Dounreay is a complex and technically challenging
task, and we have a dedicated and highly skilled workforce in
Caithness to do that. I am very pleased—and Madam Chairman
made reference—that some members of the Committee have had
the opportunity to see for themselves the work that is going on
there, and I thank you for your comments about that. As a small
aside I would be very pleased to welcome those of you who were
not able to come on that occasion to visit the site at Dounreay,
clearly at your convenience, and as another slight challenge try
and avoid Januaries—the wind and the snow makes life a little
difficult for travellers. At Dounreay we have a 30-year programme
of work ahead of us, but completing that programme will mark the
end of a major source of employment and economic input for the
far north of Scotland. We recognise this as a real concern to
our local community. We live in that community, and actually it
is a great place to live, Caithness. We are committed to that
community. We are working with community organisations to identify
and support developments that will provide opportunities for growth
as the decommissioning effort at Dounreay winds down. We hope
very much that we can be helpful to the Committee in looking at
those aspects of your inquiry and at some of the waste management
issues which need to be resolved for the successful completion
of our site restoration programmes. We also hope that the Committee
will recognise that there are some areas—and the example
in my mind is the future electrical generating mix—where
the UKAEA as a company does not have a particular role to play
and we may not be able in that particular area to contribute a
great deal to your thinking. Thank you.
Q3 Chairman: Thank you
very much, Mr Harrison. In 2000 the Dounreay site restoration
plan envisaged restoration taking 60 years at a cost of £4
billion. However, in 2004 it was announced that decommissioning
would be completed by 2036 at a cost of £2.7 billion. These
are very different forecasts. Why is there such a difference?
Were the original forecasts very wildly inaccurate? Is decommissioning
more straightforward than you first thought, or have your staff
simply become more proficient in what they actually do in the
job?
Mr Harrison: Thank you for the
question. Sandy, do you want to field the question?
Mr McWhirter: Yes, certainly.
We are not comparing like with like. The original decommissioning
forecast for the Dounreay site took the site from its state in
the year 2000 right the way through to full decommissioning. However,
as you will probably gather in your second question associated
with waste management, there is no long-term strategy for the
long-term management of intermediate-level waste, so the plan
that we published this year is an interim state for the Dounreay
site where the intermediate-level wastes arising from the decommissioning
would be stored on the site pending the availability of such a
national strategy. That was the first thing. The second thing
is no, I do not think decommissioning has become any easier; and,
yes, we have got an awful lot better at doing it. What we have
done is found better and more cost-effective ways of carrying
out the decommissioning, and what that has enabled us to do is
to bring scope forward into the earlier years. The effect of that
is to reduce the cost and reduce the timescale for decommissioning
individual facilities, and a very large percentage of that significant
saving that we have made is associated with what we call hotel
costs, because as long as it exists, it needs to be maintained,
it needs to be kept wind- and weather-tight, and in some cases
it requires security cover. Whenever you have knocked it down,
it does not need that. So it is one of these situations where
more gains you more.
Chairman: In the light of that could
we look at future job prospects. Ann McKechin.
Q4 Ann McKechin: Mr Harrison,
we were commenting about the fact that the actual timescale has
now dropped by almost 30 years, and in the original timescale
of 2063 even your youngest apprentice would have had a job for
life, whereas now nobody under the age of 30 can be confident
about their future job prospects. I just wonder if you might like
to comment about the job implications.
Mr Harrison: Yes, thank you. The
reality of the work that we are carrying out at Dounreay is to
decommission the complex reactors and research facilities at Dounreay
and then demolish the associated buildings; so by definition we
are not looking at an ongoing business. In terms of value to the
taxpayer and—I will come on to it later—the skills
that we are employing of staff there, the drive for the site restoration
at Dounreay is to look to accelerate that programme, enhancing
the skills of our staff as we do that, and saving, as from the
previous questions, considerable amounts of taxpayers' money.
In terms of the employment position, the actuality is that the
bulk of the work to decommission the site, previously on the 2063
programme and continuing on the 2036 programme, would be to do
the bulk of the work in the next 20 years. The 2063 DSRP programme
had a very long tail-off to 2063, while the present programme
has a much sharper tail-off to 2036. So, yes, the rundown in employment
has been accelerated, but the basic shape of that rundown—ie
the rundown after the next 20 years—is actually the real
change in that. In terms of employment at the site—and I
think members who had the opportunity to read our submission will
have seen the graphic representation of the rundown—that
shows at high level in that form what the rundown is. We employ
in round figures about 1,200 UKAEA staff on the site at Dounreay,
and you can see a rundown of some 200 numbers over the next four
or five years, with then a stable plateau of employment, and after
that a continuing rundown. We employ, in round figures again,
about 1,500 long-term contractors on the site, and the rundown
of contract labour will follow a very similar profile.
Q5 Ann McKechin: You are
still taking on apprentices at Dounreay—we saw that when
we were on the site. Are you finding that young people are less
enthusiastic about starting apprenticeships or their careers at
Dounreay because of the fact that perhaps in 20 years' time there
is not going to be that facility there?
Mr Harrison: I have not seen any
reduction in enthusiasm; in fact a continuing level of enthusiasm;
and in no way as a trite response, there are not many industries
that can predict continuation of employment for the next 20 years.
Because of the geographic issues and the relative remoteness of
Caithness and Sutherland I have to make sure that that is not
a trite comment, because in other areas there are other industries
to redeploy the skilled workforce. We have made an absolute commitment
to recruitment of apprentices and a continuing recruitment process
with graduates, and that, I think, for the length of time, firstly,
that we need to decommission Dounreay and the level of skills,
which is a very challenging and skilful process, that is the appropriate
thing to do. That probably leads us in to other areas and perhaps
other questions to come yet, how we might contribute to the skill
base in Caithness and North Sutherland post-Dounreay. I do not
know if my colleagues want to add any more to that.
Mr McWhirter: I think I would
do. The point about apprentices is a very, very important one
to us. The craft apprentices that we take on—about five
per annum—are serving recognised craft apprenticeships which
are recognised by the respective trade unions across the country,
so the skills that these youngsters are developing are not in
any way specific to Dounreay. They are mechanics, they are electricians,
they are mechanical fitters, and those skills are applicable anywhere.
Just to support entirely what Norman says, I do not actually remember
the numbers, but I was responsible for some of the recruitment
of the apprentices in the last couple of years, and one of the
major challenges we had was reducing the applicant list to a sensible
size. So there has been no diminution of interest in taking these
positions up.
Q6 Ann McKechin: In the
memorandum obviously you point out just how vital Dounreay is
to the economy of Caithness, but you also point out that you are
not the only major employer in the area. For the benefit of the
Committee could you just remind us what other types of employment
are currently available in the area, apart from the site.
Mr Harrison: There is a manufacturing
company, Norfrost, who are based in one of the smaller satellite
towns away from Thurso, and—somebody correct me—they
manufacture refrigeration units, and they employ of the order
of 350 people. There is a specialist battery factory based in
Thurso which employs of the order of 200 people; there is a call
centre managed by British Telecom, once again of the order of
100 people. Beyond that we have a number of engineering contract
firms which are not exclusively but heavily reliant upon Dounreay,
and give it a tremendous service, actually. We are talking I think
of low hundreds in terms of employment—Sandy?
Mr McWhirter: You are right.
Mr Harrison: The rest of employment
is dispersed in agricultural and small business units.
Mr McWhirter: I think it is perhaps
worthwhile pointing out the adjacent nuclear facility at Vulcan,
which is the Royal Navy's reactor test establishment to support
its submarine fleet, which is quite a significant employer, and
the nearest thing there is to Dounreay-type of employment.
Dr Taylor: I did just want to
mention—again it is relatively small numbers, but to me
it seems like something that could be the kicking-off point for
a different sort of employment—that we actually have our
pensions office, which supports not just current UKAEA pensioners
but about 40,000 people altogether who have previously been associated
with UKAEA. That is based in Thurso. It has a fantastic record
as a pensions deliverer. It did get the go-ahead under the Energy
Act last year to bid for, for example, the NDA pension and other
public service pensions, and we would love it if that was an opportunity
of diversifying the kind of employment available.
Q7 Mr Carmichael: I am
interested in this question of what happens when you get to the
stage further down the line. If I can maybe just explain the way
my mind is working, we are told in the North Sea, for example,
in the offshore oil and gas industry, that we have now a critical
mass of expertise in the North-East, but even when there is not
the same level of exploration and production in the North Sea
you will have a base there of expertise that is exportable. The
work that you are doing at Dounreay really is leading the world,
I suppose, in many ways. You are the first to do it. Is there
going to be the same opportunity for yourselves and for other
contractors when you have that body of experience which nobody
else will have to the same degree, to sell that to other parts
of the world and other parts of the country, albeit you could
still be doing it from Caithness?
Mr Harrison: Sandy—again
I am relying on your information there.
Mr McWhirter: I think it is worthwhile
pointing out that between the 1950s and the 1990s Dounreay was
where it was happening in the nuclear industry. It was at that
time the cutting edge of nuclear technology. Anyone who
was in research and development in the nuclear industry wanted
to be associated with that project; it led the world. Where is
Dounreay today? Dounreay is at the cutting edge of nuclear technology;
it is back where it always was. The only thing that is significantly
different is the nature of nuclear research at the moment. It
is now in the decommissioning mode, and as you rightly point out—I
would not be so immodest as to suggest that we are leading the
world, but we are certainly up there with the best, and that has
attracted a tremendous amount of interest globally.
Mr Murray: Can I just say a couple
of things on that. We are working very heavily with the Caithness
and Sutherland Enterprise—CASE—to help Caithness become
a centre of excellence for decommissioning, and we have undertaken
a number of key initiatives to try and boost that image. We became
the anchor tenant with the Forss Science & Technology Park,
which is a £6 million investment in the private sector. We
have structured our tendering process to help allow local companies
to compete with international firms on Dounreay decommissioning
contracts to allow them to gain that experience and bid elsewhere
internationally. There is one contractor, for example, a local
company, JGC—which forms part of an alliance who are bidding
with an international consortium in America to decommission some
American facilities. We have also been heavily involved in the
success of the test and trials facility at Janetstown, which was
a catalyst for a £7 million investment from Caithness and
Sutherland Enterprise, and we are actively promoting nuclear decommissioning
opportunities to businesses throughout Scotland, with DTI, the
Highlands & Islands Enterprise and Scottish Enterprise, to
exploit the synergy of skills between nuclear, oil and gas and
the renewables industry sector, alongside the nuclear sector.
Mr Harrison: One of the points
where I would add to that, and it in many ways may sound slightly
contradictory, in as much as our endeavours to accelerate the
timescales and reduce the costs of the decommissioning effort
required at Dounreay, is that it actually enhances the marketability
of our workforce in terms of the clear high profile for the skills
that they are employing, and makes them a far more marketable
entity.
Q8 Mr Carmichael: So the
future for Dounreay is exporting expertise rather than importing
waste?
Mr Harrison: That is a good question.
Exporting expertise, making use of the expertise, exporting it
as opportunities would arise. In terms of your question of importing
waste, that issue sits around the deliberations of the Committee
for Radioactive Waste Management.
Dr Taylor: I think it is probably
just worth saying, though, there is absolutely no intention of
importing waste into Dounreay.
Q9 John Robertson: Mr
Harrison, in your submission you stated that "As required
by its forthcoming contract with the NDA in April, UKAEA is currently
working on the development of a Dounreay socio-economic plan to
assess the effect of its newly accelerated decommissioning strategy".
However, you are involved already in a number of socio-economic
initiatives, some in support of the Caithness and Sutherland Enterprise.
Could you summarise the efforts UKAEA are making in helping alleviate
what will be a major problem?
Mr Harrison: I am good at passing
this around. Sandy again, please.
Mr McWhirter: It is a requirement
under the Energy Act that the Nuclear Decommissioning Authority
should give appropriate heed to socio-economic impacts of its
operations, and the NDA has in turn quite rightly required the
incumbent licence holders -in our case UKAEA—to come forward
with annual socio-economic plans. We are quite fortunate at Dounreay
because we were already very proactive in this area, and indeed
we commissioned the production of our socio-economic baseline,
which was published in June 2004, and that looked forward to the
economic prospects as then perceived to the year 2016, so we have
already carried out that baseline work proactively before the
Energy Bill was even passed. So that baseline is available. The
UKAEA is a non-departmental public body, and we are effectively
owned, as you will probably be aware, by the shareholder executive.
We have plans that we are producing at the moment for the structure
and business arrangements for the UKAEA post-1 April, and those
plans have been exposed to our shareholder executive, and they
are under consideration, so some of the business plan initiatives
that we have are yet to be approved, and indeed some of them have
not yet been seen by the shareholder executive, so it would clearly
would be inappropriate for me to make any formal commitment. However,
I think it might be an idea to give you some idea of the kinds
of things we are looking at. There is Professor John Fyfe, who
is a renowned expert in dealing with communities that have been
adversely impacted upon by the closure of local industries, and
specifically the coal industry. We have engaged his services in
support of the efforts of the Caithness and Sutherland Enterprise
and Highlands and Islands Enterprise to help them in that area.
Our position is not quite as dire as the situation that John Fyfe
has walked down in the past. Most of these industries are given
notice of probably a year or even less of the closure of the major
employer in the area. In the case of UKAEA, instead of having
a cliff edge of a year, we have a gradual rundown over a period
of about 30 years, so it is a bit less challenging. Nonetheless,
Professor Fyfe will be supporting the Caithness and Sutherland
Enterprise. The kinds of areas that we would hope to be able to
work in as a company post-1 April would obviously be in managing
our existing site. There is also work that I think Marc alluded
to, in using our decommissioning skills in non-nuclear decommissioning—petrochemicals
is a good example, where many of the skills are very similar.
Of course those initiatives can be carried out in Caithness and
Sutherland, in Scotland, in the UK and indeed elsewhere. So that
perhaps, I hope, gives you some idea of the scope of the initiatives
that we are looking at in an effort to replace the work at Dounreay.
Q10 John Robertson: That
is quite interesting, but I am interested more in the kind of
work you are doing with the Caithness and Sutherland Enterprise
and the Highlands and Islands Enterprise, because you have already
cut back the amount of time you are going to take to decommission,
as we have already said earlier, and my fear is that because these
businesses locally are thinking "I've got 30 years' worth
of work" they are not looking at it with any kind of urgency.
What are you doing to make sure that everybody in the areas knows
that, while it might be 30 years today, it might be 20 years tomorrow?
Mr McWhirter: That is a very good
question. I would have to say that UKAEA has only recently embarked
upon this kind of endeavour. In the past they have been the nuclear
operator or research and development establishment, and nuclear
decommissioning establishment. It is only very recently that we
have had a requirement to go through the socio-economic planning
cycle. Nonetheless, as a responsible employer we have been trying
to minimise the impacts of our operations over the years. I actually
have a meeting with the chief executive of Caithness and Sutherland
Enterprise on Friday to begin this process, because it is very
new, and I would not wish to deceive you into thinking that we
are significantly advanced in our thinking. This is the first
year of the plan, and we are going at it in a responsible, measured
way. Our view is that we would be better to ask Caithness and
Sutherland Enterprise how we might best work, rather than to proactively
do it ourselves.
Mr Harrison: There is another
point, and it is more of a general point. I think the stimulus
of our looking at accelerating the decommissioning programme,
reducing the costs, it has been, for organisations like the Caithness
and Sutherland Enterprise, an enormous wake-up call. That is not
a derogatory comment about them, it is a stimulus to say we have
raised the profile of this issue; the timescales are still on
our side to look and develop ongoing employment in the area—so
that is my overview take on it. It is an alert call to the whole
area.
Q11 John Robertson: It
is a very good point, and it is well made, and hopefully you will
look at these things, but will you keep the Select Committee informed
of any work that you do?
Mr Harrison: Yes, absolutely.
Chairman: Thank you very much.
Q12 Mr Weir: Just to follow
up on that, you mention in your submission that it is expected
that competition will be introduced for the management of the
Dounreay site in the next five years. Given that decommissioning
is by its very nature a long-term thing, can you tell us first
of all what the effects of the contract with the NDA coming into
effect on 1 April are likely to be, and also the opening up of
competition; and if there is a contract for the management of
the site within the next five years, how long is that contract
liable to be? Is whoever gets the contract likely to be there
for the full spate of the 30-year decommissioning programme or
are we going to have a series of operators and lack of continuity
in this programme?
Mr Harrison: That is a very interesting
question. Do you want to go first, Beth?
Dr Taylor: I do not think I am
going to be terribly helpful on this, because I think the answer
is that we do not know, and we wish we did. In a way this is all
to be determined by the NDA, which is only just in the process
really of forming itself at the moment. Certainly there are negotiations
going on at the moment for the length of the first contract, and
although I do not think anyone has signed and sealed on the dotted
line, we are looking at just a few short years, basically, for
that contract. After that I think we would only be guessing, if
we talked about contracts.
Q13 Mr Weir: Is it fair
to say that the uncertainty about the length of contract is obviously
going to feed into any plans you have with Caithness and Sutherland
Enterprise for future projects? You are going to be looking at
the relatively short time span of the contract you have, rather
than over a 30-year period.
Mr Harrison: I think there are
a number of parts to that response. Dounreay this year will be
celebrating its 50th year of being, and that represents enormous
continuity for the UKAEA in terms of its relationship with the
community in Caithness and North Sutherland. The next part that
has occurred to me—I would say this, wouldn't I?—I
have every intent that the UKAEA will continue long term in that
relationship. That leads back then to a question about length
of contract and future competition, and certainly what we as a
company are doing, we are gearing up and looking very closely—and
the gearing up is reflected in accelerating the programme, the
reducing of costs, some of our breakthrough thinking that we are
carrying out as a company. I think that reflects our determination
to continue and prove our worth both at Dounreay and at other
sites and, if you like, in layman's terms, do the best possible
job we can in selling our competence and commitment to the NDA,
with the real intent that we will see out that decommissioning
programme right to the closure point of the programme.
Q14 Mr Weir: Do you not
accept that by nature, if you are working a short-term contract—there
is a fundamental difference with the NDA and a short-term contract
than there is in a state monopoly, as has existed with UKAEA until
fairly recently, and that is going to impact on how you look at
things for the future?
Mr McWhirter: I do not actually
think that is likely to be to much of a problem. I would respond
in the following way. A very significant proportion of the money
that we spend at Dounreay is spent with contractors, and many
of the jobs that we will be kicking off during the currency of
what we expect to be our contract duration will themselves last
for many years—major construction jobs such as a new waste
management and treatment facility, which will take several years.
So those jobs, once the UKAEA on behalf of the NDA has contractually
committed, will go ahead. The second thing—and this is subject
to ongoing discussion and structuring of the organisations—there
will be a site licensee company which will be responsible for
the safe operation of the site, and that company we would expect
to have a degree of constancy throughout the programme that Norman
has referred to, irrespective of who wins the managing contract.
So the number of people who would be likely to be impacted upon
by a change in top management would be relatively small.
Chairman: Thank you very much. Alistair?
Q15 Mr Carmichael: You
can hardly be happy about a situation where you have a contract
starting on 1 April, and you do not know yet what the terms of
it are going to be.
Mr Harrison: For the first contract—and
the contract has been referred to the "dowry" contract—although
we do not have an absolutely clear picture, our understanding
is that it will be a high probability of being a two year contract
with the option on a performance basis to extend for a further
year. So the high probability is that it is going to be two-plus-one
years for the first contract—which will be allocated to
ourselves as the present incumbent of the site.
Q16 Mr Carmichael: But
ten weeks out from the starting date of that contract you still
do not know that for certain.
Mr Harrison: The contract is not
signed, that is why I am not saying—
Q17 Mr Carmichael: Forgive
me—"contract" also suggests an agreement. If something
as basic as this is not yet confirmed, your view seems to be to
take it or leave it.
Dr Taylor: We do know for certain
that we will be the people who hold this contract; that has always
been clear from day one. We do have an agreed work plan for the
first year, and to a lesser degree of definition for the second
year as well, so I do not think there will be a kind of vacuum
on 1 April; but it is certainly true that the final details are
still up for grabs.
Q18 Mr Sarwar: How successful
have you been in finding alternative employment for your current
workers in the Caithness area and other parts of Scotland?
Mr Harrison: I was just mentally
moving around the question, because certainly our immediate workforce
is fully committed to the decommissioning effort at Dounreay.
I was just thinking whether—Beth?
Dr Taylor: It is not really other
parts of Scotland. I wonder if we could talk about other parts
of England, because we do have these two southern sites—Harwell,
and Winfrith in Dorset—which are much more advanced in the
decommissioning process, so the number of people who work for
us now at those sites is trivial compared to what it used to be
when we were a big research organisation. We have actually been
quite successful, I think, in that as we pulled back the decommissioning
work and cleaned up the site we have been quite successful in
turning these two sites into science and technology parks, so
we are now back up to about two-thirds the same number of people
who were employed by us at the height of our research programme
are now working on those sites but they are not working for us;
they are working for new companies like QinetiQ, like Regenysis,
I think it is called, who have come on to our sites to use the
facilities that are available to use, the land that is available.
That has been a real success story. We know it is going to be
much more challenging in Dounreay for all sorts of reasons, but
to me that just says it is possible to have life after a nuclear
site.
Q19 Mr Sarwar: Do you
have any plans for the people who are going to lose jobs, how
to find jobs for them?
Mr Harrison: Certainly within
the developing business plan of the UKAEA we have real aspirations
to take on new business, and we would look within our existing
skill base for redeploying staff from both Dounreay and our southern
division sites. That is still in the future, and the plan is still
in a fluid development.
Mr McWhirter: Can I just support
that a little bit too. What Norman says is obviously right. The
situation we find ourselves in is not without precedent, although
it is a little bit different. Some years ago a whole section of
the UKAEA workforce was devolved into what was then AEA Technology,
and that was very successfully floated off, demonstrating that
there are skills available in these nuclear establishments that
have market interest. Indeed, the battery factory that Norman
referred to there is a success, principally because of technology
that was developed by these people who were employed at Dounreay
and at our southern sites; so there are certainly precedents there.
The last thing I would say on this subject is we are blessed in
Caithness by the existence of a tremendous communications infrastructure.
I do not mean roads and rails when I say that; I mean computer
communications. Much to my chagrin at the time a hole was dug
all the way up the A9, and into that has been put a very large
number of high bandwidth fibreoptic cables. One of the characteristics
of the workforce that you will see on page five of our submission
is that a high percentage of them are professional staff, so there
is clearly the opportunity to take on consultancy work there.
With these high bandwidth communications there is no need, or
less need, for the staff to actually go to the customer; consultancy
is something that can be delivered over fibreoptic links. So it
is not exactly the same thing, but not without precedent.
|
