AMEC alliance announced preferred bidder for the Sellafield competition

10/07/2008


London, United Kingdom (11 July 2008) - The UK Nuclear Decommissioning Authority (NDA) today announced that Nuclear Management Partners (NMP) has been selected as preferred bidder in the competition to secure a Parent Body Organisation (PBO) for the Sellafield Site Licence Company (SLC). NMP is the consortium comprising AMEC, AREVA, and URS Washington Division.

Samir Brikho, AMEC Chief Executive said:
"AMEC is delighted to be part of the consortium successfully selected as preferred bidder for one of the most important public sector contracts in the UK. AMEC and our consortium members will be contributing world class skills to Sellafield, ensuring that this programme is carried out safely and effectively to the benefit of the taxpayer."

Didier Pfleger, Chief Operating Officer of AMEC's Power and Process Division said:
"This is a significant recognition of the expertise within AMEC's nuclear business. We are delighted that the NDA has acknowledged the unique combination of skills within the consortium and we now look forward to getting underway and making a significant contribution on this complex and demanding programme."

Dr Ian Roxburgh, NDA Chief Executive said:
"The selection of Nuclear Management Partners as the Sellafield preferred bidder is a significant step forward in the NDA's drive to attract world class management and innovation to the UK's nuclear decommissioning industry.

"Nuclear Management Partners have emerged from a very strong field of four bidders and the NDA will now move towards contract finalisation and ultimately the award of this contract, the successful implementation of which is crucial to the mission of the overall clean-up and decommissioning of the UK's existing nuclear legacy."

The NDA will now enter into a period of detailed engagement with NMP leading to contract finalisation, which is expected in October 2008.

The PBO contract covers the reprocessing and waste storage facilities at Sellafield, the former nuclear power stations Calder Hall and Windscale (all in West Cumbria); the Capenhurst nuclear site and an engineering design centre at Risely in Cheshire. The contract is expected to offer business to the value of c. £1.3 billion per annum and associated dividend opportunities of c.£50 million per annum, subject to the level of improved SLC performance and efficiency achieved. The contract would be awarded initially for a period of five years with the potential of further extension periods, subject to performance, for a total of 17 years.

NMP brings together a unique capability focused on delivering the NDA's aim and objectives at Sellafield. In particular, the team has a strong safety culture, experience of delivering change and innovation and a track record of open and transparent engagement with a wide range of stakeholders, all of which meet NDA aims. Details on each of the alliance partners are set out at the end of this announcement.

The international nuclear industry is undergoing a renaissance and AMEC is strongly positioned to continue its growth in an acutely resource constrained market.

AMEC is providing increasing levels of nuclear consultancy, reactor services and project management to customers in the UK, Canada, South Africa and other countries worldwide. In the UK, AMEC is a strategic partner to British Energy, where both companies are working together to improve the efficiency and lifespan of their reactors, whilst in Canada, reactor restarts for Bruce Power represent some of the most complex challenges in the nuclear industry today. In the decommissioning sector, AMEC continues its work at Dounreay in Scotland, and is working with funding from the European Bank for Reconstruction and Development to clean up former Soviet facilities in Eastern Europe.

Impact on earnings
Subject to contract finalisation, AMEC's share of NMP revenues will relate solely to recharges of costs of AMEC management working on the contract, whilst potential annual earnings will reflect AMEC's share of a dividend of up to £50 million, subject to performance against targets agreed with the NDA.

Subject to contract finalisation, which is expected in October 2008, the impact of the contract on AMEC group performance in 2008 is not expected to be material. The contract will help underpin performance in the Power and Process division in 2009 and the attainment of group margin targets in 2010. Further guidance will be provided following contract finalisation.

Return to topTop