Consultants pocket £8m in fees for new UK nuclear plant in Hinkley
Nearly £8m was spent on Government advisers to broker the deal for the UK’s first nuclear power station in 20 years, an amount critics claim “stinks like a rotting fish’s head”.
The lawyers Slaughter and May did best of the five consultants that spent 18 months in negotiations with energy giant EDF to secure the go-ahead for Somerset’s £14bn Hinkley Point C plant.
The legal giant was handed a fee of £2.76m in October. This was when the Energy Secretary Ed Davey finally confirmed an agreement on the so-called “strike price” – the minimum EDF will received for electricity generated at Hinkley – at £92.50 per megawatt hour.
Paul Flynn, the Labour MP for Newport West, uncovered the fees in a Parliamentary answer to one of a series of questions he has asked the Government, as he looks to prove that the project will ultimately be a “mega-disaster”.
Mr Flynn told The Independent negotiations had been “neurotically secretive”, and the strike price was the result of a “limbo dance of creative mathematics”. He argued that the consultants’ fees were “definitely excessive and they stink like a rotting fish’s head”.
EDF has looked to cover the costs of building Hinkley’s new reactor by bringing in investors from China, “a country [the UK] previously wouldn’t have touched with a bargepole”, according to Mr Flynn.
This comment echoes union criticisms of China’s role last month. GMB national secretary for energy Gary Smith said the Government could not warn about the threat of Chinese hackers trying to steal state secrets through well-orchestrated cyber-attacks and then give the country access to power plants. This could give China the chance to “turn the lights on and off” across Britain.
The Chinese are ultimately hoping to lead construction of their own nuclear station in the UK, which they believe could prove to be a lucrative market. Sources close to the Government have insisted the Chinese see taking a stake in Hinkley as a step to improving their reputation as a stable investor in big infrastructure deals.
The other consultants to the Department for Energy and Climate Change included KPMG, one of the Big Four UK accountants. It was paid more than £2.1m, while the investment bank Lazard took home £1.65m. Leigh Fisher Associates, a management consultant to the infrastructure industry, was the next best paid at £1.37m. The last adviser, Willis, received only £16,575.
There could be more bumper paydays to come, as the Government still has to steer the deal through the European Union. States that have become increasingly anti-nuclear in the wake of Japan’s Fukushima disaster in 2011, particularly Germany and Austria, are believed to be preparing to try to kill the Hinkley development on state aid grounds.