BNFL agrees £40m compensation to Kansai for falsified nuclear shipment

British Nuclear Fuels faces a bill exceeding £50m – and years of headache – as a result of the consignment of fuel it sent to Japan with falsified quality assurance documentation. The company announced this week that it had reached an agreement with Kansai Electric to take the eight assemblies of mixed plutonium-uranium (Mox) fuel […]

British Nuclear Fuels faces a bill exceeding £50m – and years of headache – as a result of the consignment of fuel it sent to Japan with falsified quality assurance documentation.

The company announced this week that it had reached an agreement with Kansai Electric to take the eight assemblies of mixed plutonium-uranium (Mox) fuel back to the UK and pay the Japanese utility £40m in compensation – more than six times the value of the consignment.

BNFL will also bear the costs of bringing the fuel back. It would not give a figure, but it could run to several million pounds.

Anna Walker, the senior energy official at the Department of Trade and Industry, said it would take `two to three years’ to finalise the arrangements.

One source said it had taken years – and about £3m – to organise the shipment of the fuel, which totals just under 4 tonnes, to Japan. The return journey is expected to be even more controversial and expensive.

He said, for instance, that whereas the fuel was dispatched on two carrier ships with mounted guns and a detachment of armed UK Atomic Energy Authority police on board, there have been demands for a naval escort on the return journey.

Although the vessels would only enter the territorial waters of the two host countries, the presence of plutonium means the shipment will also require the approval of the US government under its bilateral treaty with Japan.

BNFL then faces the dilemma of what to do with the fuel on its return. While it has insisted all along that there is no technical deficiency with the pellets in question – the consignment underwent a secondary manual measurement – it will clearly not attempt to send them back to Japan in Mox fuel assemblies.

An insider said the pellets were `hopelessly tainted’, and any attempt to reintroduce them into other fuel assemblies could jeopardise future business from Japan, which is seen as vital to the future of the Mox business. Norman Askew, BNFL’s chief executive who was appointed in the wake of the scandal, said this week that the agreement with Kansai provided `opportunities for something like £4bn-worth of new business’.

But because the uranium and plutonium are by-products of reprocessing Kansai Electric fuel, the pellets remain the property of the Japanese utility. As such, they must eventually be returned, either as reformed Mox fuel or as waste.

However, BNFL is unable to reprocess Mox fuel at present at its Thermal Oxide Reprocessing Plant at Sellafield – and there is no certainty it will ever reconfigure the plant to do so.

This would seem to leave BNFL with no alternative but to store the pellets at Sellafield – at its own expense – for as long as it takes for the Japanese to agree to take them back. They would presumably only do so, however, if the pellets were treated and repackaged as reprocessing waste rather than new fuel.

* Nuclear power station operator British Energy is to lease Canada’s largest nuclear power complex from Ontario Power Generation in a £1bn deal.

The Bruce power station site in south western Ontario has a total capacity of 3GW, with the potential to go up to 4.5GW. The move is part of the company’s strategy to move into the US and Canada energy markets.

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