nuclear-news

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…. http://www.belfasttelegraph.co.uk/business/news/babcock-to-take-800m-hit-after-ending-nuclear-decommissioning-contract-35568664.html