Recommendation 23

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