UK cancels US$7 billion nuclear contract

The UK’s Nuclear Decommissioning Authority (NDA) has been forced to terminate a GB£6.1 billion (US$7.5 billion) contract to decommission 12 redundant nuclear reactors.

The Cavendish Fluor Group – a joint venture between British firm Cavendish Nuclear (a subsidiary of Babcock International) and US firm Fluor – was awarded the 14-year contract in 2012, and started its decommissioning work in 2014.

The NDA then began a process of ‘consolidation’ – ensuring the contents of the contract accurately matched the required work.

In a statement, UK energy minister Greg Clark said, “It has become clear through this consolidation process that there is a significant mismatch between the work that was specified in the contract as tendered in 2012 and awarded in 2014, and the work that actually needs to be done.

“The scale of the additional work is such that the Board considers that it would amount to a material change to the specification on which bidders were invited in 2012 to tender.”

The contract with the Cavendish Fluor Group has now been officially terminated by the UK’s energy secretary, Greg Clark, but requires a costly two-year notice period.

Furthermore, due to the mismanagement of the process, the UK’s High Court has ruled that the government must pay over US$100 million in compensation to companies who entered the flawed bidding process.

Greg Clark, said, “We have a responsibility to ensure that the NDA’s decisions reflect its legal obligations, including under procurement law, that further risks to taxpayers’ money are contained and that robust arrangements are put in place to deliver this essential decommissioning programme.”