13th Jan 2015 10:11
LONDON (Alliance News) - Amec Foster Wheeler PLC Tuesday said the UK Nuclear Decommissioning Authority has informed the company it will terminate the Nuclear Management Partners Sellafield contract in 2016, which was awarded to a consortium of companies including Amec.
Despite the authority stripping the consortium of the contract from the first quarter of 2016, Amec said it does not impact any other work that the company is carrying out at the Sellafield site.
Amec said the contract cancellation is "not performance related", and said the progress made since the contract was awarded in 2008 should "not be wasted," it said in a statement.
The GBP9 billion contract was for the clean up of nuclear waste at the Sellafield site, a nuclear reprocessing site, close to the village of Seascale on the coast of the Irish Sea in Cumbria, north west England. The contract was extended by the authority in 2013.
The nuclear authority last year increased its estimate for cleaning up the UK's nuclear sites by 7% to GBP110 billion over the next 120 years, with Sellafield accounting for the vast bulk of that.
The Public Accounts Committee and the National Audit Office have both accused the Nuclear Management Partners consortium of cost overruns and delays, according to the BBC.
Amec said Tuesday the consortium has generated GBP650 million of efficiency savings since the contract was awarded and highlighted that the consortium met 96% of its targets in 2014, adding that Sellafield's safety performance "is now the best ever", said the company.
The company said the consortium will continue to ensure the operation at Sellafield runs safely and progress with the implementation of a new contractual model, said Amec.
"Amec Foster Wheeler looks forward to continuing a significant role in the decommissioning work at Sellafield," said the company in a statement.
In September, Amec was awarded an separate contract worth between GBP240 million and GBP336 million with fellow listed Balfour Beatty PLC to deliver Sellafield's Box Encapsulation Plant, which is not affected by the contract termination.
Listed James Fisher and Sons PLC also won a GBP150 million contract in December in a consortium led by M+W Group for the design and delivery of a purpose built nuclear waste store and the construction of a new direct import facility to handle radioactive waste.
The Nuclear Management Partners consortium includes Amec, French engineer Areva SA and US engineering group URS Corp.
Amec shares were down 1.4% to 784.69 pence per share on Tuesday morning, whilst Balfour Beatty shares were up 0.8% to 206.90 pence per share. James Fisher shares fell 3.0% to 1,075.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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