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Babcock company down £800m after ending nuclear decommissioning contract

Babcock to take £800m hit after ending nuclear decommissioning contract, Belfast Telegraph, March 27 2017 Engineering services firm Babcock has said it will take an £800 million hit after terminating a major Government contract to decommission and manage 12 UK nuclear sites.

The 14-year contract will end nine years early in August 2019, knocking its order book and resulting in a £100 million drop in annual revenues for eight consecutive financial years from 2020/21.

Shares in Babcock slipped more than 3.4% following the news.

Babcock – which holds a 65% stake in the Cavendish Fluor Partnership (CFP) that won the original contract from the Nuclear Decommissioning Authority (NDA) – said the amount of work required was “materially different” than initially specified.

The company explained that the mismatch between what was requested in the contract and the work that needed to be done put the contract at risk of legal action.

The NDA revealed on Monday that it has shelled out £97.5 million to settle litigation claims by two American firms – Bechtel and Energy Solutions – over the deal.

Energy Solutions will receive £76.5 million, plus £8.5 million of costs, while Bechtel will be paid around £12.5 million in total.

The £6.1 billion contract ran into controversy last year after a High Court judge ruled that the NDA had wrongly awarded the contract to CFP.

Energy Secretary Greg Clark announced that the Government is now launching an independent inquiry into both the 2012 procurement process, as well as the reasons why the contract proved to be “unsustainable”…

The contract covered the management and decommissioning of 12 Magnox nuclear sites, which included two research facilities….


March 29, 2017 - Posted by | business and costs, UK

1 Comment »

  1. Doug Kimmelman owner of Energy Solutions had a fund-raiser for Trump and gave him about $300,000. Energy Solutions is trying to take-over WCS so that they will have the monopoly and it will be impossible to get someone to deal seriously with the waste. The Obama US Dept. Of Justice sued them because it violates anti-trust law. But, now Trump’s in charge. Trump’s put money in the budget to park the high level waste, uncovered, at WCS – I think the total is $128 million but could be wrong.

    Comment by miningawareness | March 29, 2017 | Reply

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