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Tories about to build biggest white elephant

The government is shortly set to announce its decision to go ahead with building a second Sellafield MOX plant (SMP) at a cost of £3bn. MOX is a mixed uranium-plutonium oxide used as a nuclear reactor fuel.

The history of the first MOX plant, which was forced to close down several years ago, make this decision almost unbelievable. The fist plant cost £490m, plus £113m because of the falsification of the pellet data discovered in Japan, plus £100m decommissioning costs – total £700m. For this cost at taxpayers’ expense it was publicly announced that it would produce 120 tonnes of MOX per year.

A decade later when it was closed down it had produced, not 1,200 tonnes, but just 13 tonnes, i.e. nearly three-quarters of a billion pounds to produce only 1% of what was promised, which was anyway never sold. Build another one – surely not? But that’s exactly what they’re going to do.

I was the Minister for the Environment for the earlier part of this period 1997-2003. I strenuously opposed this whole first SMP project, sending a comprehensive 6-page minute dated 11 September 2011 (bizarrely the date of 9/11) to Margaret Beckett, then Secretary of State, setting out in detail the grounds on which the economic case for the SMP was not made out. I have still retained a copy of this.

This whole episode is a classic example in recent times of the fixing of No.10 by a very powerful industrial lobby, the fixing of Whitehall by regulatory capture, and the fixing of the ‘justification’ of the project by a carefully chosen consultancy (ADL) which provided the figures purported to warrant it. ADL submitted a report, never made public even in redacted form but which I saw, which claimed that the net present value of the SMP over the ensuing decade was £199m. In fact, as I showed in my September 2001 minute, the various bases for this claim were over-optimistic to the point of fantasy, and the most likely figure was probably negative – as indeed it turned out.

I later wrote to Sir John Bourn, the Comptroller and Auditor General, asking that the economics and accounting of the SMP should be fully investigated. His reply dated 8 September 2004, a copy of which I retain, states that “the SMP is yet to produce sufficient MOX fuel to meet a customer order”, but that “it would be much more expensive to close the plant immediately than to continue operating”. Not long afterwards the plant closed.

I later wrote again to the National Audit Office requesting that it “investigate the economic evidence used to justify the licensing of the SMP and publish any report before a decision is taken on whether or not to proceed with a second plant”. I was told by the Comptroller and Auditor General, then Amyas Morse, in his reply of 18 May 2011, which I retain, that he had “decided not to investigate and report on the decision to license the plant because it was taken a long time ago and the scope of the AD Little report commissioned to assess the economic case was very narrowly focused and specific to the circumstances of the decision to be taken”. I need hardly point out the poverty and irrelevance of these excuses.

2 Comments

  1. Robert says:

    £700 million what’s that then in wind turbine about 100.

    I really think we need to get our own power base built and if that means coal fired power stations I do not care a dam.

  2. David Ellis says:

    The Tories are lining the pockets of their developer chums with contracts for white elephant projects that are going to leave this country even more indebted than it was before and there will be no economic stimulation as a result of it. This, HS2, the end of local planning vetos are set to cripple us financially and destroy what is left of the pleasant environment.

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