Cost of Magnox D&D has increased by up to 45 percent
The National Audit Office (NAO) of the United Kingdom reported on September 11 that the total cost of the work needed to put the country’s Magnox nuclear sites into “care and maintenance” has increased by up to an estimated £2.7 billion (about $3.5 billion) since the office’s last estimate in 2017. The NAO, which scrutinizes U.K. public spending, released its findings in a report examining the Nuclear Decommissioning Authority’s (NDA) management of a renegotiated decontamination and decommissioning contract with Cavendish Fluor Partnership.
Rising D&D costs: When the NDA awarded Cavendish Fluor Partnership the contract to decommission two nuclear research sites and 10 Magnox nuclear power sites in 2014, the D&D cost was estimated at £3.8 billion (about $4.9 billion). In an October 2017 report, the NAO found that the expected costs of decommissioning the Magnox sites increased by £2.2 billion, to £6 billion (about $7.7 billion). The NDA’s decommissioning contract with Cavendish Fluor Partnership, a joint venture of London-based Babcock International and the U.S. engineering firm Fluor, ended in August 2019.
According to the NAO, in July 2019, the NDA estimated that the Magnox program would cost even more: between £6.9 billion and £8.7 billion (about $8.9 billion and $11.2 billion), with a best estimate of £7.5 billion (about $9.6 billion) to get all the Magnox sites cleared and safely enclosed, ready for what is called the care and maintenance phase of decommissioning. During that phase, the reactors and waste facilities are sealed and the site kept in a secure state, potentially for some 80 years, to allow radiation levels to decay over time.
“Costs are likely to be subject to further change, largely because of the inherent uncertainties involved in cleaning up the U.K.’s nuclear sites,” the NAO said, adding that the NDA is continuing to refine its estimates.
Magnox contract: In September 2014, following a competitive procurement exercise, the NDA awarded Cavendish Fluor Partnership a 14-year contract to manage the Magnox site decommissioning. In July 2016, however, a U.K. court ruled that the NDA had wrongly decided the outcome of the procurement process, and the NDA decided to terminate the contract with the company nine years early in 2019. In the interim, the contract was also renegotiated due to a “significant mismatch” between the work specified in the tendered contract and the work that needed to be done. The management of the Magnox sites and ownership of Magnox Ltd., the company responsible for carrying out the site decommissioning work, transferred from Cavendish Fluor Partnership to the NDA on September 1, 2019.
“Given the challenging circumstances created by the failure of the initial procurement and early phase of the Magnox contract, the NDA did well to negotiate a revised contract to enable it to move to its new delivery model,” the NAO said in a release announcing its 2020 report.
The NAO also noted that Cavendish Fluor Partnership completed most of the decommissioning work it was asked to do under the renegotiated contract, completing 93 percent of what the NDA requested over the contract’s reduced five-year period. The company succeeded in placing the first Magnox site (Bradwell) into a safe and enclosed state and completed the defueling of the last Magnox plant (Wyfla). The company, however, fully met only 45 of the 97 targets for the expected physical states for sites at the end of the original 14-year contract, the office added.