Annual Report & Accounts 2006/7 Our mission is to: Deliver safe, sustainable and publicly acceptable solutions to the challenge of nuclear clean-up and waste management. This means never compromising on safety or security, taking full account of our social and environmental responsibilities, always seeking value for money for the taxpayer and actively engaging with stakeholders. 02 NDA Report and Accounts 2006/7 Welcome to the NDA Annual Report & Accounts 2006/7 Presented to Parliament pursuant sections 14 [6], [8] and 26 [10], [11] of the Energy Act 2004. Laid before the Houses of Parliament 9 October 2007 HC/1001. Laid before the Scottish Parliament by the Scottish Ministers 9 October 2007 SE/2007/171. Ordered by the House of Commons to be printed 9 October 2007. HC1001 London: The Stationery Office. 03 The Nuclear Decommissioning Authority 4 Contents 6 Our Priorities (NDA) is a non-departmental public 9 Chairman’s Report body set up under the Energy Act 2004. 11 Chief Executive’s Review This means that operationally we are 17 NDA Business Review 19 HSSE independent of Government, although 22 Decommissioning and Clean-up 24 Waste Management we report to the Secretary of State for 26 Commercial Operation Business, Enterprise and Regulatory 30 Nuclear Materials 32 Competition and Contracting Reform and to the Scottish Ministers. 36 Innovation, Skills, Research and Development R&D and Good Practice 42 Socio-Economic Support Our remit is to ensure that the and Stakeholder Engagement UK’s civil public sector nuclear sites 45 Operating Unit Reports 49 Site Licensee Reports for which we are responsible are 49 British Nuclear Group Sellafield Limited (BNGSL) decommissioned and cleaned up 57 Magnox Electric Limited 73 United Kingdom Atomic safely, securely, cost-effectively, Energy Authority (UKAEA) affordably and in ways that protect 83 Springfields Fuels Limited 86 NDA Owned Subsidiary Reports the environment for this and future 86 Direct Rail Services (DRS) 88 UK Nirex Limited generations. We are also required to 91 Directors and Executives ensure that our existing commercial 96 Financial Review plant is operated effectively and 108 Directors’ Report efficiently until current contracts have 110 Corporate Governance 112 Remuneration Report been met to generate income to fund 114 Statement of the Directors’ decommissioning and clean-up. and Accounting Officer Responsibilities 115 Statement on Internal Control 118 The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament 120 The Annual Accounts 120 Consolidated Income and Expenditure Account 120 Consolidated Statement of Recognised Gains and Losses 121 Balance Sheet 122 Consolidated Cash Flow Statement 123 Notes to the Accounts 152 Glossary 155 Contact Details Annual Report and Accounts 2006/7 Published by the Nuclear Decommissioning Authority 2007 © the Nuclear Decommissioning Authority 2007 ISBN 978-0-10-295108-0 Clockwise from top left: Clean-up work in progress under the Calder Hall towers Trawsfynydd site NDA staff members Bradwell site worker Berkeley site NDA staff member Bradwell site Berkeley site worker 04 NDA Report and Accounts 2006/7 Our Priorities To achieve our mission, our strategic priorities are to: Encourage the highest standards in safety, security and environmental management; Drive hazard reduction; Secure our funding framework; Gain the support and confidence of our stakeholders; Achieve more for less; Develop integrated waste solutions; Maximise commercial value; Build an effective industry; and Create a world class organisation. 06 NDA Report and Accounts 2006/7 Encourage the highest standards in Develop integrated waste solutions safety, security and environmental Developing an implementation plan management to deliver the repository programme; Facilitating measurable improvements Providing the long-term management across our sites. solution for UK radioactive materials; Delivering national solutions for interim Drive hazard reduction higher activity materials storage; Ensuring radioactive waste continues to Overseeing Low Level Waste (LLW) be put into a passively safe form in the management. earliest feasible timeframe and in line with agreed end states for our sites. Maximise commercial value Maximising commercial revenues Secure our funding framework and realising the full potential value Understanding and defining the nuclear from our assets in order to reduce liabilities; Further developing funding the burden on the UK taxpayer. mechanisms with our stakeholders that will provide the right environment for Build an effective industry the cost-effective delivery of our remit. Facilitating the restructuring of the industry and creating a competitive Gain the support and confidence market with the right commercial of our stakeholders framework that will deliver excellent Building a reputation for openness contractor performance; Investing and transparency and effective in skills, research and development stakeholder engagement; Delivering and innovation; Developing and our socio-economic obligations. engaging with the supply chain. Achieve more for less Create a world class organisation Achieving value for money by planning Developing high performing people and managing the programme to deliver and teams and operating to the more decommissioning for less cost highest quality standards. without compromising health, safety, security and the environment; Defining and reducing the cost base. Top left: Magnox Storage Pond at Sellafield Top right: In the middle of the Separation Area on the Sellafield site, a redundant storage facility is demolished. 07 “We have continued to deliver value for money for the taxpayer, with efficiency in the year exceeding £200 million before payment of incentive fees to our contractors.” Sir Anthony Cleaver Chairman 08 NDA Report and Accounts 2006/7 Chairman’s Report Throughout the year, the NDA has continued to build its own organisation and in the last quarter successfully incorporated those staff who had previously worked for UK Nirex Limited. This followed the Government’s decision to make the NDA responsible for implementing the long-term policy for managing the UK’s higher activity radioactive wastes. I am pleased to report that at the end of the NDA’s second year of operation In the course of the year, we also qualified we have continued to make excellent for the Investors in People (IiP) standard progress against the objectives laid and were accredited under ISO9001. down in the Energy Act 2004. I would In summary, I believe the NDA is now well highlight the following key areas: equipped to handle the major issues for • The performance of the sites on safety which it is responsible. continues to show improvement and A key requirement, if the NDA is to achieve there have been no major incidents in all that the Government would wish, is the the year; development of the NDA’s funding system • We have continued to deliver value for to facilitate agreement of the optimum money for the taxpayer, with efficiency programme with our contractors. in the year exceeding £200 million There are still other major challenges ahead before payment of incentive fees to – continuing to reduce hazards on our our contractors; sites; ensuring that all the competitions • Competitions for Low Level Waste are completed satisfactorily; determining Repository Limited and for Sellafield the best way of handling our stocks of Limited are both progressing well; plutonium and uranium; securing Low • The Combined Nuclear Pension Plan Level Waste (LLW) capacity and long-term (CNPP) was set up ready for the transfer arrangements for the management of of employees, following the privatisation higher activity radioactive wastes. of Springfields Fuels Limited; Equally, there is still much to do to ensure • The relevant assets of UKAEA were that the socio-economic challenges that transferred to the NDA immediately our activities will present in many of our following the year end; locations are handled as effectively as • Considerable progress was made on the possible. However, I believe we now skills agenda with the announcement understand what needs to be done and of the creation of the Nuclear Academy as I leave the NDA I am confident that it and the creation of the Dalton Institute’s will be able to rise to all these challenges. Cumbrian operation; and • We continued to hold extensive dialogue through the Site Stakeholder Groups (SSG) and the National Stakeholder Group (NSG). Sir Anthony Cleaver Chairman Top left: Berkeley site Top right: Sir Anthony Cleaver, Chairman 09 “I am in no doubt that the establishment of the NDA has introduced a new focus to the industry as well as a renewed sense of partnership with the communities that host our sites.” Dr Ian Roxburgh Chief Executive and Accounting Officer 10 NDA Report and Accounts 2006/7 Chief Executive’s Review Operations Our income was £1,206 million, some £112 million less than budgeted, largely accounted for by the continued unavailability of the Thermal Oxide Reprocessing Plant (THORP). The THORP outage continued mainly because of operational difficulties with downstream ‘evaporator’ plants used During the year, the NDA has continued to treat waste products from THORP and to deliver its mission while improving other waste streams. These difficulties its understanding of how this can be also affected Magnox reprocessing and achieved with better value for money. vitrification output, neither of which met the targets set out in the NDA 2006/7 Annual Plan. These reprocessing issues have Safety,