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Not a day seems to go by without some announcement or speculation on which project or programme will be cut or which government department or agency is looking to refocus its activities on improving its front line activities whilst reducing the demands on the public purse.
Frequently the debate seems to be polarised between the large public sector and the impact on the private sector. We now all know that the interactions between the two sectors are many and varied, as typified by the banking crisis, what happens in one often affects the other.
No where is this dependency more accurate than in the nuclear sector. Since the earliest days in the 1940s, the nuclear industry has relied upon contractors to help design and build everything that was required; from major buildings and facilities, through systems and rigs to the smallest components.
Today the Nuclear Decommissioning Authority (NDA) presides over 19 sites*, which represents the UK’s public sector nuclear legacy. That nuclear legacy is currently valued at £44.5bn (discounted), a very significant sum even if you don’t compare it with the size of the UK’s national debt. Our budget is currently £2.8bn which is made up by traditional contributions from the Treasury and the continued exploitation of our commercial facilities including the continued operation of 2 nuclear power stations which provide much needed generating capacity.
Last financial year, the largest proportion of our total budget was spent by the sites in the supply chain, at Tier 2 and below, some £1.4bn.
Our challenge going forward is clear, how to balance the needs to decommission the legacy, cost-effectively and affordably. Safety cannot ever be compromised in this process, so in certain circumstances even if the NDA had all the money we needed today we would find ourselves limited by other factors. Anyone who remembers their physics lessons may recall the concept of radioactive half life, which “is the time taken for the activity of a given radioactive substance to half its initial value, each radionuclide has a unique half-life”. This means that sometimes leaving a facility safely in appropriate care and maintenance state is actually the best option.
So back to the challenge. How do we deliver our mission and how is this supported by the supply chain? As ever there is no single answer, but there are a series of activities and decisions ahead, similar to those which are also being debated across the rest of public sector.
Key is clarity of mission, the so called “front line” activities as described by the rest of the public sector. NDA has recently published its “Draft Strategy, Published September 2010 for Consultation”**, this takes our complex environmental restoration programme and groups all our activities under 6 strategic themes;
- Site restoration,
- Spent fuels,
- Nuclear materials,
- Integrated waste management,
- Business optimisation and
- Critical enablers.
Each of these themes is then divided into individual strategies, three within the Critical Enablers are key to the Supply Chain; Contracting and Incentivisation, Competition and Supply Chain Development.
These three strategies together highlight the boundaries under which the NDA and the sites operate and recognise the significant contributions made by that the supply chain, but more importantly seeks to enable the development of the relationship going forward. This is even more critical within the current economic environment where the challenge will be to do more for less. The clear hope is that the private sector will continue to use its experience, tools and techniques to help drive best value for money.
ACE and its Energy Sector Interest Group has a key role to play in helping NDA and the various sites deliver our mission. So what does that mean specifically? There are three apparently simple requests:
Contractors focus on delivering projects or tasks to time, cost and quality;
Contractors highlight areas or opportunities whereby specific activities can be undertaken more effectively and efficiently; and
Generic issues affecting multiple sites and or the NDA are raised appropriately, ideally by the ACE.
In reality these requests actually overlap, and go to the heart of a more mature relationship between the client and our contractors. Gone are the days when it could best be described as simply “do as I say”. Today we are looking for contractors who can work with us to ensure that our various stakeholders see real progress in dealing with the nuclear liability, that it is done safely and continues to building confidence and that it can be delivered cost effectively and affordably.
Money is a finite and precious. NDA has to compete for our share of Treasury funds along with every other public sector body be that law and order, health, defence or education. The £1.4bn currently spent in the supply chain brings its own challenges. It’s significant enough to attract major questions as we compete for our next three year budget under the CSR process, but equally gives real opportunity to contribute to our mission and to materially reduce the size of the nuclear legacy. Much good work has been done to date including supporting the government’s Managing Radioactive Waste Safely policy which requires NDA to deliver a geological disposal facility for higher activity wastes.
But the real challenge remains “spend every penny as though it were your own and get most value for our investment”. The NDA’s mission relies upon the private sector and the private sector needs clients like NDA and the sites to continue to allow the companies to grow and remain profitable. The next three years and beyond will not be easy for anyone – public or private sector. But our mission is important locally, regionally, nationally and internationally and companies who are successful with us are well placed to be successful in other areas on the nuclear markets including the new build agenda and defence, as well as overseas – nuclear decommissioning is not constrained by national boundaries.
If you require further information our web site has a suppliers section.
*The 19 sites are grouped together and operated under contracts on behalf of the NDA by Springfields, Sellafield, Research Reactors Sites Ltd (RSRL) Magnox, Low Level Waste Repository (LLWR) and Dounreay Sites Restoration Ltd (DSRL).
**The NDA’s consultation began on the 1st of September 2010 and will close on the 24th November 2010. More information on the draft strategy and how you can contribute can be found at www.nda.gov.uk.
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