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Reassurances for workers caught up in botched nuclear power station deal

Workers at nuclear power stations at the heart of a botched decommissioning deal will not be under threat, Energy Secretary Greg Clark has said.

Mr Clark offered reassurances over the future of the workforce after he announced that a £6 billion contract to dismantle 12 redundant Magnox nuclear power sites had been scrapped and a Government inquiry would be held into its "flawed" tendering process.

Shadow energy secretary Rebecca Long-Bailey said the Nuclear Decommissioning Agency (NDA) - which handled the deal - had "fudged" the contract, as the Government was forced to pay out £100 million in compensation over the bungled deal.

Asking an urgent question in the Commons, Ms Long-Bailey said the future of the NDA had been "called into question" as a result of this case and urged the Government to offer assurances to workers.

Mr Clark acknowledged that it was a "defective" deal with "significant financial consequences" but promised that lessons would be learned from the failings.

He told Ms Long-Bailey: "You quite rightly raise the question of the Magnox workforce, for whom this will be a difficult day.

"I am happy to confirm to the House that there is no question of the good performance operation of the contract, it was a question of the terms of letting the contract. Good progress has been made.

"The workforce that has been employed in the decommissioning contract will continue as planned and when the report is made available, lessons will be learned about the structure of the NDA as well as any particular procedural aspects."

The 14-year contract was awarded to Cavendish Fluor Partnership (CFP) in 2014 for the management and decommissioning of the UK's first fleet of nuclear power stations, including Sizewell, in Suffolk, and Hinkley Point, in Somerset.

However, Mr Clark said there was a "significant mismatch" between the work specified when it went out to tender in 2012 and the work that actually needed to be done.

The scale of additional work was so great that the NDA considered it would amount to a material change to what bidders were invited to tender, said the minister in a written statement.

It was also revealed that the NDA has agreed to pay more than £100 million to settle outstanding litigation claims by EnergySolutions and Bechtel over the original contract award.

Earlier, union leaders raised grave concerns over what the blunder could mean for the UK nuclear industry.

Mike Clancy, general secretary of the Prospect union, said: "This is an extraordinary situation given the scale and importance of the Magnox contract to the UK nuclear industry.

"The public, and our members, will want reassurance that the termination process and uncertainty over the future of decommissioning will not lead to standards deteriorating or the loss of UK expertise."

Unite national officer Kevin Coyne said: "The whole contract process has been deeply flawed from the very start. This was highlighted by the High Court case which ruled that the NDA had failed to treat all bidders the same when it awarded the 2014 contract to clean up the Magnox reactors

"As a result, failed bidders EnergySolutions and Bechtel now stand to be awarded almost £100 million in compensation - a bill that the long-suffering taxpayer will have to pick up.

"The other big losers will be the workforce which faces a reduction in their pension entitlements. "

Engineering services firm Babcock, which holds a 65% stake in CFP, has said it will take an £800 million hit after terminating the contract

The contract will end nine years early in August 2019, knocking its order book and resulting in a £100 million drop in annual revenues for eight consecutive financial years from 2020/21.

Shares in Babcock slipped more than 3.4% following the news.

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