Nuclear Management Partners

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Background

Nuclear Management Partners (NMP) manages the Sellafield nuclear complex, which is considered 'the UK's biggest and most toxic nuclear site'.[1] It is an alliance formed by AMEC, a British construction firm in the nuclear industry, and French nuclear clean-up specialists Areva and the URS Corporation (which took over Washington Group International).[2]

In 2013 Sellafield's owner, the Nuclear Decommissioning Authority (NDA), expressed disappointment at NMP'’s running of the site and in August 2013 was reportedly deciding whether to renew NMP's contract, to re-tender it, or to take over the management itself. [1] However in October 2013 it controversially decided to hand another five-year extension to NMP's contract.

Soon after, a 292-page confidential report produced by the accountancy firm KPMG detailing the problems at Sellafield was obtained under the Freedom of Information Act. Among its revelations were KPMG's concerns over the rate of 11.5 "security events" per month at the site. [3] [4]

Ownership and payments

Sellafield is owned by the Nuclear Decommissioning Authority (NDA), which pays a company called Sellafield Ltd to manage the site. In November 2008, NMP was appointed as Sellafield Ltd's 'parent body organisation' by the NDA, in a contract that can last for up to 17 years.[5]

Financial and staffing arrangements between the three organisations are complex.

The NDA reimburses all of Sellafield Ltd's "allowable costs" for managing and operating the site, which in 2011-12 totalled £1.6 billion. In turn, Sellafield Ltd passes fees to NMP as dividends.[5]

NMP supplies executives to Sellafield Ltd, which are paid for by the NDA. This cost £32m between November 2008 and March 2012. In 2011-12, Sellafield Ltd had 16 executives from the parent body. [5]

NMP also seconds specialists to Sellafield Ltd, a practice it calls 'reachback'. The NDA pays the cost of this, plus a additional 10 per cent contribution to the parents companies' overheads. This cost £17m in 2011-12 for 63 full-time secondees, against a forecast of £12m. In November 2012, a National Audit Office (NAO) report about Sellafield noted: "In February 2012, the Authority identified a lack of evidence to support using reachback resources."[5]

In 2011-12 Sellafield Ltd also paid the companies that make up NMP £54.4 million as subcontractors. The NAO said that subcontracting arrangements were to be reviewed.[5]

The NDA estimates that Sellafield will be cleaned up by 2120.[5]

Poor management, major delays and rising costs in 2011-2013

National Audit Office findings

The November 2012 National Audit Office report described the performance of some major projects as "poor" and raised questions over the efficacy of Nuclear Management Partners' approach.[5]

It highlighted significant delays and rising costs. "Between May 2011 and March 2012, 12 of the Authority's 14 major projects delivered less than planned. Sellafield Ltd extended estimated completion dates for seven and increased the total cost estimate by £0.9 billion," it said, also blaming "poor project design and delivery by Sellafield Ltd and weaknesses in the Authority's oversight".[5]

The report concluded that "to date the performance of some of the major projects at Sellafield has been poor" and said "it is too early to judge whether the appointment of Nuclear Management Partners Limited as the parent body of Sellafield is delivering value for money".[5]

Commons' Public Accounts Committee report

February 2013 brought another report highly critical of NMP's management, this time published by the Commons Public Accounts Committee. [6] Chair Margaret Hodge MP said:

Taxpayers are not getting a good deal from the [Nuclear Decommissioning] Authority [NDA] arrangement with Nuclear Management Partners. Last year the consortium was rewarded with £54m in fees despite only two out of 14 major projects being on track.
It is unclear how long it will take to deal with hazardous radioactive waste at Sellafield or how much it will cost the taxpayer. Of the 14 current major projects, 12 were behind schedule in the last year and five of those were over budget. Furthermore, now that Cumbria county council has ruled out West Cumbria as the site of the proposed geological disposal facility, a solution to the problem of long-term storage of the waste is as far away as ever.

In August 2013 The Telegraph newspaper reported that the NDA was 'drawing up plans for how it could be run if management was taken back in to state hands'.[1]

Bonuses, taxis for cats and other inappropriate expense claims

In September 2013 it emerged that NMP executives had received £6.6 million in bonuses over three years, despite most of the work being delayed and over budget. The company was accused of wasting taxpayers’ money and of an “alarming” lack of transparency. Margaret Hodge announced she would open another Public Accounts Committee investigation into the consortium in October to look into these and other concerns.[7]

Just days later an internal audit report revealed that NMP had run up hundreds of thousands in problematic expense claims by executives at the taxpayer-funded Sellafield site between 2008 and 2012. One such claim was an 'eyecatching' £714 taxi bill for the repatriation of an executive and their cat. According to The Times,

The audit of a sample of 606 Sellafield expenses has been flagged “red” due to “serious deficiencies in the control framework”. It found that £236,781 of expense claims were inadequately described; £30,557 related to personal expenditure and £42,711 should have been lodged with NMP not the taxpayer funded body. The claims included £2,795 for flights to the US Masters golf tournament, rooms for 17 unidentified people that cost more than £3,000 and a £2,316 Apple computer. [8]

Other NMP executives' claims included an £82 per person dinner in France, and £719 for Amazon purchases without providing a receipt. [9]

NMP has repaid thousands of pounds worth of these 'incorrectly claimed' expenses.[8] In a statement, NMP said that, 'A very small proportion of Nuclear Management Partners expense claims were incorrectly registered to Sellafield Ltd. There is no evidence or suggestion of impropriety. As soon as this was brought to our attention we ensured that Sellafield Ltd’s procedures and training were tightened up and all inaccurate or potentially inaccurate claims reimbursed. The Nuclear Decommissioning Authority (NDA) itself has accepted that, in all cases where inaccurate claims were identified, repayments have been made. [10]

'Significant risks to people and the environment'

The National Audit Office described Sellafield as "the UK’s largest and most hazardous nuclear site", holding "95 per cent of the UK's nuclear waste by volume" and and said some facilities "pose significant risks to people and the environment".[5]

NAO said that "the exact nature of some of the materials has not been fully characterised as access to some locations...is not yet feasible".[5]

It noted that NMP's plan for the clean up of Sellafield "did not meet the legally binding timetables set by the Nuclear Installations Inspectorate for hazard reduction". It says that the Office for Nuclear Regulation, which replaced the Nuclear Installations Inspectorate, "has chosen not to prosecute Sellafield for non-compliance. Instead it is working with Sellafield Ltd to ensure that all necessary steps are taken to minimise hazard levels as soon as reasonably practicable".[5]

Sellafield can't 'respond to nuclear emergencies effectively'

A damning report by the Health and Safety Executive (HSE) in December 2011 revealed that staff at Sellafield did "not have the level of capability required to respond to nuclear emergencies effectively".

The HSE said errors by senior fire officers in a preparedness exercise "could have led to delays in responding to the nuclear emergency and a prolonged release of radioactive material off-site".

Two HSE fire specialists watched an exercise in December 2011 which tested the Sellafield fire and rescue service's ability to search for two people after a fictional accident that led to the spillage of radioactive liquid and an aerial release of radioactivity. The inspectors found evidence of "significant deficiencies around availability of resources, frequency and quality of training, competency and operational preparedness".

The HSE issued an improvement notice on Sellafield, which was 'closed out' in February 2012, meaning sufficient improvements had been made to satisfy inspectors.[11]

Good at PR though...

In June 2012 Sellafield Ltd, the NMP and Nuclear Decommissioning Authority's 'Sellafield Plan' publication won the UK’s 'most prestigious' PR and comms awards, the Chartered Institute of Public Relations (CIPR) 2012 Excellence award for external Publication of the Year. According to NMP's press release, the Sellafield Plan 'brings to life the work programmes on the Sellafield site in a way that is easy to use, update and understand. It was recognised as a real first for the communications in the industry'. [12]

People

  • Richard Caborn - former Labour minister became a non-executive director in 2007, remains a director as of August 2012
  • George Beveridge - Deputy Managing Director - Transformation/Support
  • Jim French - Executive Director - Decommissioning
  • Rory O'Neill - Executive Director - Stakeholder Relations - previously worked in the Department of Trade and Industry, with BNFL as Parliamentary Affairs Manager in the early 2000s, as lead lobbyist for the nuclear industry through the passage of the 2004 Energy Act/Bill (which created the NDA), to strategic adviser to Fluor, Westinghouse and most recently GE Hitachi
  • Claire James - Government Relations Officer[13]
  • Louise Tyson - Stakeholder Relations Officer at Sellafield Ltd. She is also the new lady mayoress of Copeland. Louise is the daughter in law of Copeland's new mayor, Peter Tyson, who was sworn in after 20 years of being involved in local politics in May 2012. [14]
  • John Reynolds - Head of Media Relations
  • Karl Connor - Press Officer

Contact, Resources and Notes

Resources

Contact

Website:http://www.sellafieldsites.com/
Twitter: @SellafieldLtd

Notes

  1. ↑ 1.0 1.1 1.2 Amec defends Sellafield nuclear clean-up record as £22bn contract hangs in balance,The Telegraph, 8:29PM BST 11 August 2013, acc 13 Aug 2013
  2. ↑ Tim Webb, Caborn lands nuclear job with Amec, The Observer, Sunday 11 November 2007
  3. ↑ Report damns Sellafield firm over clean-up, The Independent, 10 November 2013
  4. ↑ See: File:KPMG-report-on-Sellafield-Performance-to-31-May-2013.pdf, published on the Nuclear Decommissioning Authority's website in November 2013
  5. ↑ 5.00 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 National Audit Office, Managing risk reduction at Sellafield, November 2012
  6. ↑ Nuclear Decommissioning Authority: Managing risk at Sellafield: Twenty-fourth Report of Session 2012-13
  7. ↑ Tim Webb, heading Millions ‘wasted on bonuses for greedy Sellafield managers’, £The Times, 7 Sept 2013
  8. ↑ 8.0 8.1 Nic Fildes,heading Cat out of the bag over Sellafield chiefs’ expenses, £The Times, 9 Sept 2013
  9. ↑ James Waterson, Atomic kitten: Nuclear boss claims cat taxi, City A.M. 9 Sept 2013, acc 10 Sept 2013
  10. ↑ Sellafield Ltd and Nuclear Management Partners statements regarding expenses, Press release, Sellafield, 8 September 2013, acc 11 Sept 2013
  11. ↑ Terry Macalister and Richard Cookson, 'Nuclear safety watchdog criticises Sellafield's emergency readiness' http://www.guardian.co.uk/environment/2012/dec/26/sellafield-emergency-readiness-nuclear-watchdog], The Guardian, 26 December 2012
  12. ↑ National accolade for Sellafield Plan, NMP website, 20th June 2012
  13. ↑ The Sellafield Ltd Executive team, Sellafield Ltd website, undated, acc 21 June 2012
  14. ↑ She’s a lady, Sellafield Ltd website, 31 May 2012, acc 21 June 2012
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