Treasury set to reward nuclear sell-off boss for raising £8bn in BNFL disposals

Friday, February 1, 2008

The Times, January 31, 2008
The man responsible for raising £8.3 billion for the Treasury by selling off some of the country's most controversial assets is poised to receive a bonus of £766,200 for successfully winding up British Nuclear Fuels.
Mike Parker, chief executive of BNFL, which used to own Westinghouse, the nuclear reactor maker, as well as Sellafield, could receive the bonus before the end of the financial year, The Times has learnt.

Mr Parker, who joined the state-owned company in 2003, is in line for the payout — 150 per cent of his basic salary, after selling a string of nuclear assets for the Government. The disposals have seen BNFL, which once employed 10,000 people, reduced to a shell with fewer than 100 staff.

The businesses sold by Mr Parker and his team include Westinghouse, which was sold to Toshiba, the Japanse industrial giant, and an engineering business known as Project Services, which was sold to VT Group, the shipbuilding to education business.

Mr Parker, who joined the organisation from Dow Chemical Company, also oversaw the sale of BNG America, BNFL's Reactor Sites Management business, and a one-third stake in AWE Management — a joint venture with Lockheed Martin and Serco to manage the Atomic Weapons Establishment sites at Aldermaston and Burghfield. At the same time, he established the BNFL technology services operations as a standalone public sector science business, known as Nexia Solutions, on a similar footing to the National Physical Laboratory, and handed over responsibility for Sellafield to the Nuclear Decommissioning Authority. The Westinghouse transaction alone provided an exceptional profit on disposal of £2.1 billion for the Treasury.

Government officials are considering when Mr Parker's bonus should be paid, as his work at BNFL will effectively end on April 1 when the company's one-third stake in Urenco, a uranium enrichment business, is handed back to the Shareholder Executive, an arm of the Treasury.

A partial payout could be made before the end of this financial year, although there is pressure to hold back the money until October when Mr Parker's duties at BNFL will be fully discharged and private firms take over responsibility for decommissioning the vast Sellafield site.

After that time, BNFL will cease to exist except for a handful of legal and financial staff who have to wind it up. It will then be the responsibility of the Shareholder Executive to achieve a sale of the Government's stake in Urenco, one of the world's largest uranium enrichment companies.

The Treasury is hoping for a final £2 billion windfall from this sale, benefiting from the soaring price of uranium. However, it is facing opposition from the other shareholders - the governments of Germany and the Netherlands — which have long resisted Downing Street's efforts to privatise its holding.

Toshiba-Westinghouse, the former BNFL arm, is now competing with Areva of France for a huge order to build atomic power stations in South Africa. Final bids are due in today and construction could start as early as 2010. But the plant could be the first of as many as 20 new reactors, each costing about £1billion, that could be built in the country over the coming years.

South Africa is focusing on nuclear power generation as the solution to its energy needs.

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