Link to the study - European Parliament - Europa

Nuclear Decommissioning: Management of Costs and Risks
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Since the Sellafield project is outside the scope of the Major Projects Authority, it is also not reviewed
by that authority (NAO 2012). The Major Projects Authority aims to improve project performance for
the taxpayer. It is collaboration between the Cabinet Office, HM Treasury and departments and has
the fundamental aim of significantly improving the delivery success rate of major projects across
central government. It was launched in 2011 (UK Government 2013).
3.3.9. Overall characteristics of the example
Several reasons for cost escalation and delays can be identified in the UK Sellafield case, e.g.:
Weaknesses in cost and schedule estimation were identified.
Weaknesses in planning, e.g. of waste treatment facilities, caused delays and cost increases.
Gaps in information and weakness in communication between NDA and Sellafield Limited were
identified. Until 2011 NDA did not collect enough robust and timely information on projects
from Sellafield Limited to enable timely intervention.
The decommissioning concept, with nearly continuous work at the site for more than 100 years
and performed by thousands of employees, points to weaknesses in the technical concept, in the
work planning as well as in the cost calculation.
NDA does not report externally on the performance of its major projects. Projects therefore are
outside the scope of the Major Projects Authority and thus are not subject to independent
reviews.
Sellafield Limited does not bear risks for delay and cost increases, because the contract with NDA
requires it to reimburse Sellafield Limited for all allowable costs. The roles of management
quality, work performance, excellent project management and risk control are questionable
under such framework conditions.
NDA uses fees to incentivize efficiencies and achieve milestones, but a major part of the fees are
paid regardless of any project progress. The criteria for other fee contributions are intransparent
and seem to fail to work properly.
Sellafield Limited`s contracts with its subcontractors generally involve very little risk transfer.
Rising costs and the impact of delays are therefore borne by Sellafield Limited and then passed
to NDA and finally to the taxpayer.
Cost effectiveness is poor, due to extensive use of costly external contractors and workforce.
Experiences gained in the process are not accumulated at NDA but remain mostly with the
consultants.
Gaps in the capability of subcontractors to undertake the required work are identified. The
supply chain lacks capacity.
The following conclusions can be drawn from this:
A reliable decommissioning plan is required on which to base appropriate project management,
planning and risk management and to perform reliable cost and time estimations on. Without
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