Core issues

Even if the government doesn't give the green light to new builds in the nuclear sector, it will spend a massive £56bn on cleaning up existing facilities. That's £56bn. It makes the London Olympics project, on which the government is spending about £10bn, look like small fry. The same goes for the £10bn Crossrail scheme.

There is a growing sense of momentum building in the nuclear sector. Last month contractor Amec announced it was teaming up with the UK Atomic Energy Authority (UKAEA). This month British Nuclear Fuels (BNFL) sold its US operation Westing House to Toshiba. Meanwhile the UK's biggest nuclear facility, Sellafield, is radically restructuring its project controls arrangements, as revealed in QS News last week.

Yet at the same time the industry is in an uncertain state. BNFL's US move has fuelled speculation that it will go on to sell off its UK operating arm, British Nuclear Group (BNG). The UKAEA's deal suggests it will be bidding to run power stations that until now have been under BNFL.

It will take canny operators to negotiate the changing state of the sector, but the rewards for those who manage it will be huge. The £56bn earmarked for decommissioning work is to be spent over 50 to 75 years. Added to that is the possibility of new builds. One new power station could cost £2bn and would take 10 years to complete. And industry experts reckon that if the government decides on a nuclear future it would need to build around 10 plants at once. QS News has put together a six-point guide to the sector:

What is the Current State of the UK nuclear history

The UK nuclear industry splits into two parts - privatised and state-owned. The latter is being opened up to competition and it's this side that is in a state of flux. The privatised side is owned by British Energy, which runs a fleet of eight power stations, including Dungeness and Sizewell B.

The state-owned side of the industry comprises 11 main power plants known as magnox stations. These assets were operated by state-owned BNG until 1 April 2005 when they were transferred to the Nuclear Decommissioning Authority. The effect was that BNG switched from being a steward of the magnox stations to being a service provider, known as a tier one contractor.

The other tier one contractor in the market is another government body, the UKAEA. Together the tier one contractors run the magnox stations, including Sellafield (BNG) and the second most important plant Dounreay (UKAEA). Both tier one contractors are in the process of re-bidding most of the work they subcontract out to external parties, including QSs and project managers. These "subcontractors" are known as tier two contractors.

The signs are that new builds will be okayed in the lifetime of this government and they won’t do it in an election year, so that doesn’t leave much time

Ashley Prail, director, Turner & Townsend

What complicates things is that the roles of the tier one contractors themselves are also under review. Each of their "management and operational" contracts will be re-tendered in the next year or two. As soon as June 2006 tender documents are due out for the M&O contracts on Dounreay and nuclear waste depository Drigg, near Sellafield. Another twist is that the tier one contractors will be bidding for tier two work. Hence the UKAEA's alliance with Amec and CH2M Hill.

What will the struture of the nuclear look like once the dust has settled

Nigel Adcock, managing director of Gleeds Energy, laughs and shakes his head: "By the end of 2007 there could be quite a switch around. All 11 power stations could be under new ownership by then."

But he adds that he has full confidence in the NDA, which is overseeing the whole shake-up. "The NDA is instigating scrupulous transparency in the bidding processes," he says. Whatever the future, Adcock certainly seems to believe this is an industry worth grappling with. His firm Gleeds is understood to be bidding for Sellafield's new look project controls contract, which sees a series of jobs rationalised into one giant deal with a contract value of £20m. Gleeds has also successfully re-tendered for a QSing role at the power station in recent weeks.

What type of work will be up for grabs in the nuclear sector?

Most work in the nuclear sector will continue to be decommissioning, which will provide a goldmine of opportunities for construction consultants.

For up to 75 years, or longer if new builds go ahead, there will be projects focused on the dismantling of facilities and disposing of waste. They will all need QSs, project managers, programme managers, project controls experts and disputes resolutions specialists.

No one knows what the vehicles will be for financing

Mark Howard, head of Nuclear,EC Harris

And decommissioning does involve building new facilities. Jeff Whitfield, executive director at Stapleton International, says: "Where they need to treat waste they need buildings, machinery and mechanical handling plant."

Another factor that might not be immediately obvious is that most people in the nuclear industry do not walk around wearing white suits in lead-lined tanks, says Whitfield. Rather they work at desks. So the construction work needed for this part of the industry is about building and maintaining administrative offices, accounts departments, canteens, car parks and so on.

But it won't be easy money. Whitfield says that processes in the nuclear sector can be complex to oversee due to tight safety controls. "The safety procedures are incredibly strict. Even the jumpsuits that workers wear will be cased in giant glass containers when they're taken off."

Whitfield says change control is a key service needed in the nuclear industry but warns that delivering can be difficult. "Change control is especially tough when you are decommissioning a facility because of the risk of contamination. People take it very seriously in this industry, even in areas that are pretty clean."

Then there is the possibility of working on the construction of new power stations. The best idea of what shape such projects would take can probably be gleaned from a look at Finland, where plans to build the first nuclear power station in Europe for 10 years are underway.

The facility is going to cost £2bn and is due for completion in 2009. An international array of firms have been brought in. It is being built by a Franco-German consortium made up of Framatome ANP and Simmens. The UK's Franklin + Andrews is providing contract consulting on the civils element of the project. This includes the creation of a harbour to receive equipment for the project via sea, ground works, installation works and the creation of roads and control rooms.

Even the jumpsuits will be cased in giant glass containers

Jeff Whitfield, executive director, Stapleton Intl

Ashley Prail, director at Turner & Townsend, says: "We are trying to develop an understanding of what new builds will look like. It could be a lesser number of larger stations or more small ones. Another issue is who would the client be?" But he adds that whatever happens, it is certain that the work would require "commercial management, process management, project controls and the like, just the same as any other project".

Will new nuclear sites get the all clear in the UK?

All the signs suggest that the government will decide to go head with new builds. The price of oil is rising and nuclear is emerging as a relatively green fuel. The government is currently working on white paper on energy and letting slip a steady stream of hints that it favours a nuclear future.

At F+A, the man overseeing the Finnish job, head of energy Mark Gudgeon, believes it will happen. Part of the impetus to win work on the Finnish reactor was that it would stand the firm in good stead for similar projects it expects to see back home, he says.

Mark Howard, head of nuclear, at EC Harris, says: "New build is looking increasingly likely, we're investing heavily in the sector and looking at who we would work with if it did happen."

He said the real uncertainty is around who the clients would be and how they would buy services. "No one knows yet what the vehicles will be for financing the work and that will determine how procurement happens."

The government is going to face nimbyism. Eyes
are already being cast at exiting sites, where the grid lines are already connected and local people are aware of the economic benefits of living next door to a power station

Nigel Adcock, managing director, Gleeds Energy

When and where would the new builds happen?

T&T's Prail reckons the government will make the big decision on new builds in a year to 18 months: "The signs are that (new builds will be okayed) in the lifetime of this government and they won't do it in an election year, so that doesn't leave much time."

Howard says if the decision to start work on a new facility was taken tomorrow, it would take 10 years before the plant was producing power. "If we want to get on with it we need to start on the pre works, such as outline business cases and early design, very soon."

Adcock at Gleeds adds that if the UK is committed to maintaining even current levels of nuclear power, new builds need to get underway fast, as time is running out for the existing reactors. Because nuclear power stations have limited lives for safety reasons, all 11 magnox stations will be out of commission by 2011. That will leave only the eight British Energy stations. Of these, seven - the advanced gas-cooled reactors - will be out of action by around 2020, Adcock says. This will leave a sole reactor, Sizewell B, the most recently built power station in the UK, completed 10 years ago. But even this one will stop producing power by 2035.

Adcock believes any new reactors are most likely to be built where nuclear facilities are already based: "The government is going to face nimbyism. Eyes are already being cast at existing sites, where the grid lines are already connected and local people are aware of the economic benefits of living next door to a power station."

Has the UK got the skills it needs for the new build

Maurice Petch, partner, at Davis Langdon says: "An awful lot of expertise has been lost. Many who were working in the sector 10 years ago will not go back. They'll be too deeply involved in other things now. Sizewell B finished 10 years ago and it will be 10 years before new builds start so most experts will be retired by then."

Adcock expects talent to be drafted in from the US and possibly Australia, where new builds are happening now. Firms such as Bechtel and Fluor are already operating in the UK, while UKAEA's new partner CH2M Hill is also an American player. But Adcock says he doesn't feel threatened by foreign firms. He points out that many UK consultancies, such as Gleeds and Faithful+Gould, have US and Australian arms they could draw on.

Whitfield at Stapleton emphasises the extent to which skills from other sectors are transferable to the nuclear industry. There is the power generation side, he says, for which people with experience from traditional power stations would have relevant skills. There is also a need to build traditional offices and business facilities. Plus the principles involved in dispute resolution, project controls and QSing will all apply.