UK faces legal challenge over à‚£7bn nuclear contract

US-based Energy Solutions is taking the UK Nuclear Decommissioning Authority (NDA) to court over losing out on a à‚£7bn contract to decommission Britain’s oldest nuclear power plants.

Meanwhile other bidders are considering similar action and it may ultimately mean an entirely new competition will have to be run. The NDA told Power Engineering International, however, that it is confident that the competition was carried out in a ‘robust’ correct manner.

The Salt Lake City-based company is taking the action after losing the 14-year contract to engineering company Babcock and Texas-based Fluor.

Energy Solutions alleges that the assessments done by the NDA, the government-funded body responsible for making the decision, were incorrect and came to the wrong conclusion. The claim is thought to be worth hundreds of millions of pounds.

The deal is one of the largest government contracts ever put out to tender and involves cleaning 12 of Britain‘s 25 nuclear sites, including Sizewell, Hinkley and Dungeness.

In an email statement to Power Engineering International, the NDA responded to the action, saying, The NDA was advised late on Monday afternoon à‚ that legal action is being commenced by Energy Solutions, one of the participants in the Magnox/RSRL competition. The NDA remains confident that the competition process was carried out in a robust manner in compliance with EU guidelines, and the new contract looks set to deliver savings in excess of à‚£1bn against the previous plan.

The standstill period following the announcement of the preferred bidder closed on April 15th and the transition programme leading to the preferred bidder taking over the management of the 12 nuclear sites in September is now underway.”
The clean-up contract that the companies hope to take over employs about 3,000 workers on 12 ageing nuclear sites across the UK. It covers Britain’s 10 reactors as well two old nuclear research sites in Oxfordshire and Dorset, including the world’s oldest commercial nuclear power plant, Calder Hall in Cumbria.

The Nuclear Decommissioning Authority started the competition two years ago, and work is expected to start in September. But according to Bloomberg, lawyers have warned that the court challenge is likely to delay the start of the contract.

Energy Solutions declined to comment but a spokesperson said the legal action spoke for itself.

The company, which has been managing the nuclear sites for the past six years, had competed for the contract in partnership with the US company Bechtel but is taking legal action alone.

Bechtel said it had not joined Energy Solutions in the legal challenge because “we are in different commercial circumstances”, but added: “We respect EnergySolutions’ right to independently seek legal redress.”

CH2M Hill, which competed in a second consortium including Serco and Areva, is also considering mounting a legal challenge. Rolls-Royce, which competed in a third consortium involving Amec and Atkins, is also weighing action. A Rolls-Royce spokesman said it was “taking time to consider and review its options.”

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