ANNEX A: Building A91 and Radioactive Liquid Effluent
Treatment PlantBrief Project History
55. Following competition, the MOD awarded a contract
to Babcock Woodhall-Duckham Limited in the late 1970s for the
construction of Building A91 and the Radioactive Liquid Effluent
Treatment Plant (RALETP). Then scheduled to become operational
in 1991, the RALETP was intended to process aqueous wastes arising
from activities carried out in various buildings at AWE Aldermaston.
56. During non-radioactive commissioning of the plant
in 1990, leakage due to corrosion was discovered in stainless
steel pipework and filter vessels. As a consequence, active commissioning
had to be halted. A taskforce was set up in 1991 to examine the
corrosion problem. Following extensive investigations the taskforce
concluded that the corrosion of the stainless steel was due to
a combination of high levels of chloride in the liquid effluent
and contamination of the system by bacteria known to corrode stainless
steel.
57. Tenders were then invited for project definition
of corrosion rectification in the RALETP. The successful tenderer
was NNC Limited, to whom the MOD awarded a contract in October
1993. In April of the same year, management and operation of AWE
had been contractorised following competition, with a seven-year
contract being awarded to Hunting BRAE Limited (HBL) under Government
Owned Contractor Operated (GOCO) arrangements. Under the term
contract, the RALETP rectification contract with NNC Limited was
novated to HBL.
58. Despite the (purported) completion of pre-commissioning
in September 1998, corrosion was again identified in January 1999.
Active commissioning was, once again, brought to a halt. There
being no reasonable prospect of rectifying the technical problems
within any practicable timescale, the MOD recognized that there
was no future for the facility. Formal written rejection of the
works was notified to HBL on 29 March 2000. (By that time, and
following competition, the award of a new AWE management and operation
contract to a new consortium, AWE Management Limited, had been
announced. This became effective on 1 April 2000.)
59. Legal advice was that MOD had a sufficiently
robust case to pursue a claim against HBL for the re-imbursement
of the costs of refurbishment, consequential damages and expenses
incurred. A settlement was reached in April 2003, under which
the MOD received £12M from HBL.
60. Following the evaluation of a number of options,
it was determined that there was no viable use for building A91.
Both it and the RALETP have therefore been written off as a constructive
loss amounting to £147M.
61. A post project evaluation was conducted in 2004/05.
The lessons from this were promulgated in a Learning from Experience
seminar at Abbey Wood on 31 January 2006.
62. A timeline of key project events is shown below.
1978 | Following a report which highlighted inadequate waste management facilities at AWE, public undertaking given to replace inadequate facilities and overhaul safety procedures.
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1980 | Process for defining requirements of new facility begins.
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1985 | Building construction begins.
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1986 | Further Treasury approval sought following cost increases and project slippage.
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1990 | White commissioning begins (testing process using ordinary water).
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Mar 1991 | Corrosion found.
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Oct 1991 | Report confirmed the extent of the corrosion.
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Dec 1991 | Decision taken to repair A91 and not to pursue alternative options.
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1993 | Plan for rectification of problems agreed.
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Apr 1993 | AWE contractorised and contract novated to HBL.
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Oct 1993 | Contract placed for rectification of A91.
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Jan 1999 | Further corrosion found.
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Mar 2000 | MOD formally rejects RALETP.
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Apr 2000 | AWE ML takes over GOCO contract from HBL.
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2001 | Treasury Solicitor submits formal claim on HBL on MOD's behalf.
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Mar 2003 | Value of RALETP written down in 02/03 accounts to amount likely to be recovered in settlement.
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Apr 2003 | Commercial settlement reached between MOD and HBL.
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Dec 2003 | Advance notification of write off submitted to CDP.
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Feb 2004 | Building written down to zero in 03/04 accounts to reflect that the conversion of the building is unlikely to be cost effective.
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May 2005 | Post project evaluation for project produced.
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Oct 2005 | Case submitted to CDP for formal write-off within his delegated authority.
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Jan 2006 | Learning from Experience seminar at Abbey Wood.
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Jan 2006 | HCDC interest stimulated through scrutiny of MOD Annual report and Accounts.
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