Archived press release

Taxpayers Face Huge Bill For Nuclear Legacy

17 April 1996

Page FRIENDS OF THE EARTH FOR IMMEDIATE RELEASE WEDNESDAY 17 APRIL 1996 TAXPAYERS FACE HUGE BILL FOR NUCLEAR LEGACY

Friends of the Earth and the Consortium of Opposing Local Authorities[COLA] have today written to the National Audit Office asking them to urgently investigate Government plans to privatise the nuclear industry(1).The groups warn that current arrangements for funding nuclear liabilities(such as decommissioning power stations and management of nuclear waste) are woefully inadequate and may lead to the taxpayer having to pay a huge price for the privatisation of the nuclear industry. The findings are contained in a report published by FOE and COLA today (2).

Concern centres around a fund the Government is proposing to set up to meet British Energy's long-term nuclear liabilities (3). Under the current proposals British Energy would contribute an annual sum of 16 million to the fund. However, according to the report this sum is totally inadequate and annual payments should be increased to 208 million. This is needed to provide real assurance that the fund will be able to cope with liability payments.

The reasons for the thirteen-fold discrepancy are:

The fund excludes important long-term liabilities, including the disposal of radioactive waste.

The performance of the fund is based on an assumption of 3.5% growth until 2130 which is not credible.

The lower figure assumes a 230 million start-up subsidy which may contravene EC law on state aids.

In addition there are significant risks that the estimates for the cost of decommissioning and waste disposal are too low and as reactors begin to shut down the remaining nuclear power stations will not be able to generate sufficient cash.

Uta Bellion, Campaigns Director, of Friends of the Earth said:

"The National Audit Office must ensure that the taxpayer is not forced to prop up a fundamentally flawed privatisation plan. Not only could such a situation ultimately lead to a breach of EU law, but it is also yet another case of the public being conned to foot the bill for the fat cats of industry."

Notes for Editors

(1) The letter was sent by Charles Secrett (Director of Friends of the Earth)and Fred Barker (COLA Policy Advisor) to John Bourn, Comptroller and Auditor General at the National Audit Office.

(2) The report entitled "British Energy Annual Segregated Fund Charges -How A Factor Of 10 Disappears" was written by Mike Sadnicki, an independent Operational Research Consultant.

(3) The fund is entitled "the Segregated Fund". British Energy consists of the 7 Advanced Gas-Cooled Reactors and 1 Pressurised Water Reactor the Government proposes to privatise.

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Published by Friends of the Earth Trust