Dounreay - The nature of the new contract & how it may impact the DSG.
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1 DSG(2012)C053 Dounreay - nature of the new contract & how it may impact the DSG. Presentation to the DSG 13 th June 2012 Nigel Lowe NDA Head of Programme DSRL 1 Agenda Historic Perspective Types of Contract New Dounreay Contract General NDA Updates 2
2 Historic Perspective Short Term NDA established late 2004 Assess the magnitude of the civil nuclear liability across the UK. It developed site Interim End State (IES) definitions following stakeholder consultations. Early estimate for Dounreay s IES was 2038 Estimates & Contracts also put in place for Sellafield and Magnox. Medium Term NDA planned to revisit the contracts 2009 Tender process for the new Dounreay contract begins Nov 2011 Preferred Bidder Announced April 2012 New contract in force Long Term Magnox / Sellafield Government DECC / Treasury / SG, Strategic, Nuclear Decommissioning Authority, Strategy Parent Companies Guarantee Stakeholders Dounreay Site PBO Site Licences & Consents Regulators Dividends, SLC Civil Nuclear Constabulary, Dounreay Site Facing Team PBO Parents Reach back Working Capital Facility, Dividends 3
3 Three Types of Contract Cost = Fixed Risk Division = With Supplier Fixed Price Target Cost Cost = Target Jointly Agreed & Fixed Risk Division = Shared Cost Reimbursable (cost plus) Cost = Not Fixed Risk Division = With Customer 5 Nature of the New Contract What it Buys Interim End State Physical condition agreed with regulators A date & target cost to get to IES Adherence to LCs and NDA procedures How do we ensure it delivers what we want? It is incentivised & through NDA governance Allowable / Disallowable Costs Termination Conditions Protected Funding Security Socio Economics Pensions etc 6
4 Gain Share / Pain Share (1 of 3) We agree a target cost Actual Cost Target Cost Shared Between NDA & DSRL Estimate At Completion Target cost is adjusted for inflation Maximum liability and maximum gain is capped Actual Cost & Estimate at Completion regularly checked 7 Cardinal Milestones Agreed across the life of the contract (2 of 3) M41 Fuels Characterised for future management in accordance with Requirement 11a or otherwise removed from the site M29 POCO of D2700 (Dounreay Cementation Plant) M03 Drain and decontaminate DFR pond ready for demolition in accordance with the strategy to remove hazards M05 Demonstration that the liquid metal hazard from DFR materials has been eliminated M66 Particles remediated to agreed end point in accordance with Requirement 20 M10 Completion of delivery of all in reactor DFR Breeder fuel to Sellafield 8
5 Performance Based Incentives (3 of 3) Designed to drive behaviours Topics Asset Management Change Control Compliance with NDA Procedures Socio Economics Project Files Assurance Balanced Score Card 9 Government DECC / Treasury / SG, Strategy, Nuclear Decommissioning Authority, Strategy Parent Companies Guarantee Stakeholders Dounreay Site PBO Site Licences & Consents Regulators Dividends, SLC Civil Nuclear Constabulary, Dounreay Site Facing Team PBO Parents Reach back Working Capital Facility, Dividends
6 Impact of new contract on stakeholders New IES : from 2038 to 2023 Working to a target cost Protected funding for Socio Economics PBI for Socio Economics Contractual requirement for a Socio Economic Plan Produce an annual 3 year socio economic plan Consult stakeholders on the plan 11 Georgemas Crane 12
7 National Nuclear Archive NDA has completed its development of a records management strategy for all civil nuclear sites (i.e. what to archive, how, format, volume etc) This confirms the need for the NNA. In line with previous commitments it will be at Wick. Business case now going through NDA Exec, DECC & Treasury. This will take several months. In parallel, an application for limited funding was made to ERDF. Should have feedback on whether to proceed further this month. 13
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