One of the UK's largest and most complex public procurement programmes was completed by the Nuclear Decommissioning Authority in Sellafield, Cumbria, today.
Shares in the Sellafield company were transferred from British Nuclear Fuels to a specially created private sector consortium – Nuclear Management Partners.
The newly created organisation will own the shares in Sellafield for nearly 17 years, the potential length of new and updated contracts between the NDA, NMP and Sellafield.
The value of the contract is estimated to be a staggering £22bn over its full lifetime, with work covered approximately reaching £1.3bn in its first year.
It signals the successful conclusion of a two-year competitive process by the NDA to secure a world-class parent body for the Sellafield organisation, held in accordance with EU procurement rules.
Over 200 people drawn from local, regional and national Government, regulators, the nuclear industry and supply chain, and the trade unions, witnessed the signing of the partnering charter between the NDA, NMP and Sellafield, at the Sellafield Centre in West Cumbria.
Mike O'Brien, Energy and Climate Change Minister, said: "This is an important milestone in tackling the UK's civil public nuclear legacy. The Government established the NDA to get to grips with the legacy after decades of inaction. We are using competition to bring in world class expertise to clean up sites in the most efficient way. Sellafield is the biggest and most technically challenging site and we look forward to seeing significant progress under NMP's management."
Stephen Henwood, chairman of the NDA, added: "Today is the culmination of enormous effort to successfully complete, on schedule, not just the NDA's biggest and most significant competition, but a public sector procurement of vital importance to UK PLC."
Henwood also suggested today's announcement implies a new relationship between the public and private sector, based on partnership delivery, to tackle the most significant nuclear decommissioning, clean-up and socio-economic challenges at the sites managed and operated by Sellafield.
The sites include Sellafield, the Capenhurst nuclear site and an Engineering Design Centre at Risley in Cheshire.
In November 2006 the NDA launched a competition in accordance with EU procurement rules to secure a new parent body for Sellafield. Nuclear Management Partners got chosen as the NDA's preferred bidder on 11 July this year and a transition agreement between the two parties was entered into on the 6 October.
NDA and NMP entered into a contractual arrangement via a Parent Body Agreement, and the NDA and Sellafield agreed a Deed of Variation to the existing Management & Operations to take account of the new parent body arrangements.
The award of the Parent Body Agreement is initially for a period of five years with the potential of further extension periods, subject to performance, to a total of 17 years.
NDA and Sellafield also agreed a Deed of Variation to the existing Management & Operations to take account of the new parent body arrangements.
The Management & Operations contract offers business initially to the value of around £1.3bn a year with associated fee of approximately £50m a year, subject to the specified level of improved performance and efficiency of the Sellafield company being met.