Privatisation of BNFL ruled out for three years

Privatisation of British Nuclear Fuels, the state-owned reprocessing company, has been ruled out for at least the next three years because of the £210m bottom-line loss it suffered last year.

The Government had hoped to resurrect the public private partnership (PPP) for BNFL next year, after being forced to abandon the partial privatisation after a safety scandal at its Sellafield plant in Cumbria.

But Hugh Collum, BNFL's chairman, said yesterday that a PPP would probably not be feasible until 2004 or 2005 because of its financial performance. BNFL has embarked on a three-year recovery plan aimed at winning back customer confidence after revelations that quality control records on shipments of mixed oxide (mox) fuel bound for Japan had been falsified.

Norman Askew, BNFL's chief executive, said the company had since complied with the recommendations of two highly critical Health and Safety Executive reports into Sellafield. Mr Askew also said the economic case for its £460m mox plant was now "as plain as a pike staff" and urged the Environment Minister Michael Meacher to approve opening the plant this summer.

BNFL already has orders for 40 per cent of the plant's capacity from German and Swedish customers but cannot open the plant until a further four-week consultation has been carried out by the Department of the Environment.

The slump into the red last year was caused mainly by a £199m loss in BNFL's Magnox electricity generation division, which followed the extended shutdown of the Wylfa nuclear reactor in Wales.

But profits from the Sellafield's Thorp reprocessing plant also collapsed, from £126m in 1999-2000 to just £3m last year. Losses in the largely US-based nuclear decommissioning business were cut from £89m to £66m, and there was a sharp jump in profits from fuel manufacturing and reactor services to £52m.

Mr Collum said BNFL now had "a solid platform on which to build" and added: "We are operating at a time when the prospects for the renaissance in nuclear power are brighter than for many years."

Mr Askew said BNFL would be interested in offering its Westinghouse design for pressurised water reactors, which has been licensed in the US, to help to reduce both Britain's dependence on imported gas and oil and its greenhouse gasses.