The Nuclear Decommissioning Authority

25 August 2006

The NDA has a statutory remit to create a competitive market for the nuclear decommissioning sector and has set out a schedule for competing the contracts to manage and operate our various sites. This schedule, which took into account BNFL’s wish to sell British Nuclear Group as an integrated whole, was approved by Government as part of the UK’s first ever national strategy for nuclear decommissioning and clean-up.

Currently, the NDA has a parent company agreement with British Nuclear Group as well as contracts with the site license companies:BNG Sellafield Ltd and Magnox Electric Ltd.

A sale of BNG by competitive process, together with a new contract for our biggest and most important site, is a complex challenge on which we and BNFL have been working together since the end of March when the sale and our Strategy were approved by Government. Contrary to media speculation, there has been no attempt by either party to delay the process as both NDA and BNFL wish to see progress in the earliest possible timeframe. Both organisations now have a better understanding about how a sale combined with a new Sellafield contract could be achieved in the context of EU procurement procedures and the implications for the timescale. Good progress has been made on the development of a new Sellafield contract which remains on track to be ready by March 2007 as previously anticipated.

The proposed separate sale by BNFL of Project Services, which is subject to Government approval, would not necessitate a change to the NDA’s overall competition strategy or timetable. Project Services provides support to BNG Sellafield and Magnox Electric at tier 2 level so does not have any contract with the NDA.

All parties agree that the first priority remains improved clean-up performance, particularly at Sellafield. BNFL and the NDA will continue to work together to agree a joint approach for this whole process.