September 29, 2017 / 7:23 AM / a year ago

UK nuclear authority gives notice on ending CFP's Magnox contract

LONDON (Reuters) - Britain’s Nuclear Decommissioning Authority (NDA) has now given notice of termination to Cavendish Fluor Partnership (CFP) for its management and decommissioning of the country’s 12 Magnox nuclear power reactors and research sites, it said on Friday.

Effective from Sept. 1 the notice ends CFP’s contract on Aug. 31, 2019, as already expected.

CFP - a joint venture between British firm Cavendish Nuclear, a subsidiary of Babcock International (BAB.L), and U.S. company Fluor Inc. (FLR.N) - was awarded the contract in 2014.

The 13.5-year contract was divided into two phases, with the first phase lasting 6.5 years and valued at more than $3.6 billion (£2.6 billion), according to Fluor’s website.

But in March this year, the government said there was a “mismatch” between the work specified in the contract and the work that actually needed to be done.

At that time Babcock International said the decision to bring the contract to an end in 2019 was taken despite the “high standard” of CFP’s performance.

In a statement then, Magnox managing director Kenny Douglas said Cavendish Nuclear and Fluor were disappointed they could not execute on the full scope of the existing contract.

“However, we remain fully committed to supporting the Magnox staff and the NDA in delivering further successes against the programme until the official termination at the end of August 2019,” he added.

The 12 Magnox sites include the Wylfa nuclear plant in Wales, which closed in 2015, the Dungeness A plant in Kent, which stopped generating power in 2006, and the Hinkley Point A plant in Somerset, which closed in 2000.

Together with the Calder Hall reactor in Sellafield, they were Britain’s first generation of nuclear power plants.

“NDA and CFP have reached agreement on the work to be performed on the sites during the contract’s remaining two years, as well as the arrangements and agreed state in which CFP will leave the sites at the end of the contract,” the NDA said in a statement on Friday.

“The NDA continues to believe that this is the best course of action for the taxpayer, removing the legal risk and ensuring the continued safe, secure operations of the sites,” it added.

No details were immediately available on who will be awarded the contract after CFP.

Reporting by Nina Chestney; Editing by Greg Mahlich

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