Source · Select Committees · Public Accounts Committee
Recommendation 23
23
The Department’s business case estimates that the transfer of the stations will cost £300 million,...
Conclusion
The Department’s business case estimates that the transfer of the stations will cost £300 million, but given the uncertainties the cost and liabilities could be as large as £1.8 billion. The uncertainties include a potential need to update IT systems, the condition and nature of assets, and the cost of employee pension contribution and redundancy payments.38 The Department and NDA told us that land and people were the two biggest transfer risks. The Department explained that it was not possible to get sufficient clarity on these areas while negotiating the main framework of the deal, but recognised that it will need clarity over, for example, which parcels of land owned by EDFE will transfer over and which people and skills were needed.39 The NDA similarly recognised that there remained significant issues to be worked through, and told us that while it had a broad picture, it needed to work up specific plans for each site and each employee base and understand the implications. It explained that the cost range for the transfer of the stations reflected numbers that were not settled yet, such as the potential pension liabilities that may transfer across from EDFE.40
Government Response
Not Addressed
HM Government
Not Addressed
6: PAC conclusion: Arrangements for transferring nuclear stations to NDA are worryingly under-developed, and there is a risk that transfer negotiations between EDFE and NDA could drag on and increase the costs to the taxpayer. 6: PAC recommendation: Within the next six months the Department, following discussions with NDA and EDFE, should write to the Committee with a detailed plan and timetable for how the transfers will take place. This plan should cover all the major aspects of the transfer including land and people, and it should identify where uncertainties remain, how those uncertainties might affect costs, and when they are likely to be resolved. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: May 2023 6.2 EDF and NDA are currently working together to deliver detailed transfer plans for the AGR stations, starting with Hunterston B, with an anticipated delivery date of May 2023. Accordingly, the department would request a revised implementation date for this recommendation of May 2023. 6.3 A sufficiently detailed transfer plan for Hunterston B will be available in May 2023, but necessary work will need to take place to support detailed transfer plans for the subsequent stations, which will be completed in the years thereafter. The department proposes sharing the detailed Hunterston B plan with the Committee when completed, with a summary of progress of plans for the remaining stations at that time.