New Parent Body for Sellafield Ltd

The UK Nuclear Decommissioning Authority (NDA) today confirmed that the programme to secure a new Parent Body Organisation (PBO) for the Sellafield Site Licence Company (SLC), Sellafield Ltd, has been completed. The shares in Sellafield Ltd, previously owned by British Nuclear Fuels Ltd, have today transferred to the new PBO, Nuclear Management Partners Ltd (NMP). NMP is the consortium comprising AMEC, AREVA, and URS Washington Division.

In addition, and as part of the programme:

The NDA and NMP have entered into a contractual arrangement via a Parent Body Agreement, and The NDA and Sellafield Ltd have agreed a Deed of Variation to the existing Management and Operations contract between the two parties to take account of the new Parent Body Agreement. The Parent Body Agreement specifies the obligations of the PBO as owner of the SLC in areas such as financing, deployment of key resources and the enhancement of performance in key areas. The Management and Operations contract embodies the delivery of all work across the SLC sites in accordance with specified terms and conditions.

AREVA The award of the Parent Body Agreement is initially for a period of five years with the potential of further extension periods, subject to performance, to a total of 17 years. The Management and Operations contract offers business initially to the value of around £1.3 billion per annum with associated fee of up to £50 million per annum, subject to the specified level of improved performance and efficiency of Sellafield Ltd being met.

Sellafield Ltd manages and operates, on behalf of the NDA, the reprocessing and waste storage facilities at Sellafield, the former nuclear power stations Calder Hall and Windscale (all in West Cumbria), and the Capenhurst nuclear site and an Engineering Design Centre at Risley in Cheshire.

Today's activity signals the successful completion of the NDA's Sellafield competition and programme, run in accordance with European Union procurement rules.

Impact on AMEC's earnings:
The NMP fee income of up to £50 million will be subject to performance against targets agreed under the Parent Body Agreement and the joint venture will incur certain costs related to its socio-economic and other commitments under the agreement. In 2009, the level of income will reflect the contract being in a transition phase.

AMEC's share of NMP will be equity accounted, and will be reported in the segmental results of the Power and Process division. It is anticipated that further details, which are currently confidential, will be provided on or before 11 December.

On 11 December 2008, AMEC will be holding a seminar for analysts and investors, focused on its nuclear business. The event is to be webcast live and will be available at the company's website.

Posted 24/11/08

*   AMEC is the largest UK-based private sector supplier of programme management and engineering services to the nuclear sector. The business builds on AMEC's 50 years experience in the nuclear market and customers include BNFL, British Energy, Bruce Power, UKAEA, AWE Aldermaston and a wide range of international nuclear utilities.

*   AREVA is involved in nuclear power and the only company to cover all industrial activities in this field. AREVA has developed unique experience in spent fuel and high-level waste management and the company's 58,000 employees are committed to continuous improvement on a daily basis, making sustainable development the focal point of the group's industrial strategy. AREVA has manufacturing facilities in 40 countries and a sales network in more than 100 and offers customers reliable technological solutions for CO2-free power generation and electricity transmission and distribution.

*   URS Corporation is a provider of engineering, construction and technical services for public agencies and private sector companies around the world, with more than 50,000 employees in a network of offices in more than 30 countries. Headquartered in San Francisco, the Company operates through three divisions: the URS Division, the EG&G Division and the Washington Division.

Over the last 60 years the Washington Division has developed particular expertise in nuclear engineering and nuclear waste management and is the market leader in the environmental management, nuclear waste management and clean-up of nuclear sites for the US Government. It has the best safety record in the US nuclear industry and from 1989-2008 it was the lead contractor for the Savannah River Site, the US equivalent to Sellafield.

It has also been responsible for the design, construction and operation of the first deep geological repository in the US licensed to dispose of nuclear waste. It has worked in the UK since 1999 as a contractor to BNFL, the UK Low Level Waste Repository and various Magnox stations and has provided consultancy services to the NDA.

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