APPENDIX 3
Memorandum by the British Nuclear Group
BACKGROUND
1. The creation of the Nuclear Decommissioning
Authority (NDA) to provide a focus on cleaning up and decommissioning
the UK's nuclear legacy is something that British Nuclear Group
wholeheartedly support.
2. On 1 April 2005 the NDA assumed ownership
of a substantial portion of the UK's civil nuclear assets and
liabilities and contracts were placed with British Nuclear Group
and the United Kingdom Atomic Energy Authority (UKAEA) to operate
assets and manage liabilities until such time as full commercial
competition could be introduced.
3. British Nuclear Group worked with the
NDA to develop challenging but effective incumbent contracts.
The creation of the NDA has accelerated the development of stronger
programme and financial control over the capital and operating
costs of nuclear sites. In addition we worked with the NDA to
develop Near Term Work Plans (NTWPs) and a Lifecycle Baselines
(LCBLs). These documents set out details of work that will be
performed to operate, decommission and clean-up sites. The LCBL
sets out the long-term objectives for each site. The NTWP is an
in-depth view of the next two or three years of the LCBL and sets
out a detailed plan of all activities which British Nuclear Group
will perform in that period. The NTWP describes the scope and
programme of services to be provided, analysed by category of
service, the budgeted cost of works scheduled (BCWS) per category,
the assumptions and qualifications underpinning the BCWS and the
overall funding limit for the site. Developing detailed procedures
to deliver programmes and rigorous cost controls would have been
necessary for the appropriate running of any project based company
and the creation of the NDA gave us the focus to prioritise this
"transformation" work.
4. Prior to and since the NDA assumed ownership
of BNFL's sites and facilities, many British Nuclear Group people
who clearly have extensive understanding and experience of the
issues and competing priorities are supporting and assisting the
NDA. Our experience of nuclear decommissioning and operations
is without rival in the UK and we look forward to continuing to
deploy this expertise for the benefit of the NDA in achieving
its challenging objectives.
5. We are committed to ensuring that the
activities funded by the NDA are carried out in a safe, secure
and environmentally acceptable way. Our goal is to carry out our
programmes of work with the smallest possible impact on the environment.
Whilst value for money is, quite rightly, the focus of the NDA,
safety remains the key criterion by which the success of our industry
will be judged.
DRIVERS FOR
CREATING THE
NDA
6. The Government had clear objectives for
the creation of the NDA. Whilst BNFL and the UKAEA had made progress
in managing the nuclear legacy it was felt that the scale and
nature of the task required a much stronger and sharper strategic
focus. The NDA was created with a specific remit to ensure the
nuclear legacy is cleaned up safely, securely and cost effectively
and in ways which protect the environment for the benefit of current
and future generations. In the White Paper `Managing the Nuclear
Legacy: A Strategy for Action 2002', the NDA's guiding principles
are articulated as delivery to high safety, security and environmental
standards; best value for money; openness and transparency and
competition so as to make the best possible use of the best available
skills.
7. British Nuclear Group is clear that the
Government's objectives are being carried forward effectively
by the NDA with strong evidence of these themes being woven into
contracts, Near Term Work Plans (NTWPs), Lifecycle Baselines (LCBLs),
performance targets and general oversight conducted by the NDA.
NDA'S ACCOUNTABILITY
8. It is clear that there has been a `step-change'
in the approach to and the work now being conducted on behalf
of the NDA. Clear direction from the NDA as our customer allows
British Nuclear Group to focus purely on their priority of operations
and clean-up without diverted by broader debates including that
of replacement nuclear build. We have also devoted time to explaining
our changing role—from owner to contractor—to a myriad
of stakeholders and there is now a growing recognition of the
focused approach provided by NDA.
9. The Energy Act establishes a requirement
on the NDA to prepare a strategy for carrying out its functions;
an annual plan for each financial year which must be submitted
to, and approved by, Ministers; and an annual report at the end
of each financial year to be submitted to the Secretary of State
and laid before Parliament. In addition the NDA is, by its very
nature, subject to the scrutiny of independent bodies such as
the Trade & Industry Select Committee. As an exercise in transparency
of accountability this has demonstrated to all parties the context
in which the NDA is operating and the expectations placed upon
it.
NDA PERFORMANCE
10. British Nuclear Group recognises that
the NDA is still less than one year old and so the organisation
is newly formed and not yet fully resourced. Nevertheless, within
a relatively short period the NDA has delivered a comprehensive
draft strategy for public consultation which gives a clearer picture
of its priorities and intentions, enabling British Nuclear Group
to better align with our customer's expectations and direct our
skills accordingly. The strategy also articulates the NDA's enthusiasm
to substantially accelerate decommissioning and clean-up. British
Nuclear Group is responding to this direction by delivering plans
for effective acceleration across the portfolio of sites it manages.
VALUE FOR
MONEY
11. With the strategic focus accompanying
the NDA on the priorities in UK decommissioning and clean-up,
British Nuclear Group has already delivered substantial cost and
time savings in relation to the nuclear legacy. These range from
several million in the short term to potentially several billion
pounds in the longer term and directly benefit the UK taxpayer.
So whilst it may be too early to conduct a clinical value-for-money
audit on the NDA, it is clear that the existence, approach and
focus of this organisation have helped to deliver substantial
reductions in nuclear clean-up costs and timescales within its
first year of existence.
12. In parallel to these tangible savings
for the UK taxpayer, there are a number of broader benefits that
have been derived from the introduction of the NDA regime. Perhaps
most notable amongst these is the metamorphosis of British Nuclear
Group from a traditional owner-operator of UK nuclear sites to
a company becoming a full player in the developing commercial
clean-up market. This has been achieved through an innovative,
fresh approach coupled with an injection of new skills such as
programme management, evolution of the supply chain, developing
bid capability and customer focus. These skills alongside the
many talents that existed in the group are in the process of achieving
a significant transformation in the UK nuclear clean-up market
place creating the commencement of a positive outcome for the
UK.
CONCLUSION
13. In summary, whilst recognising that
the NDA remains a fledgling organisation, British Nuclear Group
has witnessed tangible benefits derived from having a single-minded
customer for nuclear decommissioning and clean-up in the UK. We
believe that a clear framework of accountability and strongly
articulated priorities are already resulting in the delivery of
better value for the taxpayer in terms of operations, decommissioning
and clean-up.
14. British Nuclear Group is determined
to respond and adapt through innovation and with the applications
of our unrivalled skills, experience and perspective to release
further value for the NDA in this market—both reducing timescales
& current cost profiles identified in the initial plans.
27 January 2006
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