From Secretary of State UK, Ed Davey

As I informed the House today through a written Ministerial statement the
Nuclear Decommissioning Authority (NDA) has today announced a change to its
commercial model at Sellafield, its largest and most complex site.

1.It is important for the communities involved – and for the future of
nuclear power in this country.

We work closely with the Nuclear Decommissioning Authority and its
contractors to ensure  decommissioning  is undertaken as effectively as
possible.  But, as we are guardians of the public purse, we must also make
sure that clean-up is done in a way that delivers the best value for money.
Over the last year the NDA has been conducting a thorough review of its
business model in the unique context of Sellafield to consider what
contractual model might best deliver improved performance and value for
money.

In April last year we endorsed the Nuclear Decommissioning Authority’s
decision to roll the current Parent Body Organisation (PBO) contract
forward into the second term to ensure that the progress made in the first
five year term could be built upon.

The complexity and technical uncertainties at Sellafield are unique and
need a management structure best suited to meeting the specific challenges
faced by the site.

Sellafield is the most complex industrial site in Europe. It is home to
some of the oldest nuclear facilities in the world – the legacy ponds and
silos – which were constructed in the 40’s and 50’s - as well as the UK’s
plutonium stockpile.

Because of these unique challenges Sellafield is less well suited to the
transfer of full site-wide responsibility to the private sector via a PBO
structure.

The NDA has now recommended to Government that management arrangements are
simplified.

In future, the private sector will be retained as suppliers of Sellafield
Limited, rather than owners of the site.

Sellafield Limited will remain a publicly funded company, owned by the
NDA.

The team will be appointed and governed by a newly-constituted Board of the
Site Licence Company. The new model will, in due course, see a strategic
partner appointed by Sellafield Limited, to strengthen the programme
management and commercial capability at the site as well as playing a key
role in managing capital projects and contracts.  This approach is
recognised as best practice in other major projects, such as Crossrail and
the Olympics.

NDA and Sellafield Limited will manage the transition to the new
arrangements, expected to take around 15 months to complete.
This will be done, in close co-operation with workforce representatives,
Nuclear Management Partners (NMP), the supply chain, the regulators and the
local community.

The continued safe and secure operation of the Sellafield site will remain
the over-riding focus during the transition.

And it will remain so under the new structure.

But this new structure is the best way to ensure that safety – and value
for money – are pursued in tandem.

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