Overview of the Nuclear Decommissioning Authority
1.1 In 2005, the Nuclear Decommissioning Authority (NDA) was established as a non-departmental public body under the Energy Act 2004. Sponsored by the Department for Business, Energy & Industrial Strategy (the Department), the NDA is responsible for the operation, decommissioning and clean-up of 17 nuclear reactor and research sites in the UK.
1.2 The NDA discharges its decommissioning responsibilities through contracts with site licence companies (SLCs). These manage the sites by performing and subcontracting the work. Most SLCs are in turn owned by a parent body organisation (PBO), a consortium of private sector firms that bid for the temporary ownership of the SLC through open competition. PBOs are expected to provide business leadership to the SLC, and drive forward efficient progress on the sites. The winning PBO owns the shares in the SLC for the duration of the contract (Figure 2 overleaf).
1.3 Between 2012 and 2014, the NDA ran a competitive procurement exercise to appoint a PBO to run two SLCs.1 The new contract would replace a contract with UKAEA Ltd to decommission two research sites and a contract with Energy Solutions to decommission 10 Magnox power stations that were at, or near, the end of their operational life (Figure 3 on page 15). With an estimated value of up to £6.2 billion, the 'Magnox contract' is among the largest by value put out to tender by HM Government.
Figure 2 NDA's management of decommissioning through SLCs and PBOs
Notes 1 In April 2015 the NDA decided to bring the SLC managing the Sellafield site back under its direct control, removing the role of the PBO from its management model for the Sellafield site. 2 The NDA manages the Capenhurst and Springfields sites through decommissioning contracts and commercial arrangements. Source: National Audit Office analysis |
Figure 3 The 12 sites included in the Magnox contract
Note 1 Under the previous contractual arrangements, two separate site licence companies (SLCs) existed for the two research sites and the 10 power plants. After the contract was awarded in 2014, the two SLCs were merged into one, called Magnox Ltd. The PBO for Magnox Ltd is Cavendish Fluor Partnership. Source: National Audit Office analysis |
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1 The Magnox competition was the last in a series of PBO competitions that the NDA had completed across its estate. The first PBO competition was for the Sellafield site, followed by the Low Level Waste Repository, then Dounreay. The overall strategy for the NDA's programme of PBO competitions was approved by the Major Project Review Group in 2008.