The Nuclear Decommissioning Authority’s management of the Magnox contract Contents

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Summary

The cost of the long-term liability to decommission the UK’s civil nuclear sites now stands at £132 billion, though by its nature this estimate is inherently uncertain. Even the cost to take the Magnox sites to the care and maintenance stage of the decommissioning process is highly uncertain, with the Nuclear Decommissioning Authority (NDA) currently estimating that it will cost anything from £6.9 billion to £8.7 billion. The timetable for completing this work is similarly uncertain, with a current estimate of anything from 12 to 15 years. Past experience tells us that these estimates could increase further. Efforts to produce a reliable estimate are made more difficult by the historical legacy of decommissioning being an afterthought when the nuclear industry was established, and poor records of what hazardous materials are on the sites. In this context, the NDA faces a considerable challenge to produce a reliable cost estimate. However, lack of knowledge about the sites was a significant factor in the failure of the Magnox procurement and original contract, which seriously damaged the NDA’s reputation and has now cost the taxpayer in excess of £140 million, and it continues to be a major barrier to making progress. A further barrier is developing sufficient skills and capacity to decommission sites efficiently. That said, the UK nuclear industry possesses valuable technical skills and new technologies that could be better exploited to the benefit of the UK economy. The NDA also holds substantial assets in terms of land and employment opportunities that could be used to serve local communities.

The Department for Business, Energy & Industrial Strategy recognises that its oversight of the NDA has been weak in the past and we welcome the steps it is taking to provide stronger oversight and improved governance. Implementing the recommendations of the Holliday inquiry into the Magnox contract and the Department’s ‘Tailored Review’ of the role of the NDA will be critical and the publication of these reports cannot come soon enough. We welcome the Department and the NDA’s commitments to improve performance over the next 10 years. We also look forward to reviewing the latest quarterly performance reports which the Department has offered to send us, and note there is an enhanced commercial assurance review to consider all future commercial decisions. We will hold the Department and the NDA to account for their progress in improving the transparency of the nuclear industry and making a success of the new delivery and governance approach.