Nuclear giant BNFL £1bn in red

THE parlous state of the UK nuclear industry was laid bare today as British Nuclear Fuels announced a £1bn loss - just weeks after fellow generator British Energy unveiled a dive of £4.3bn into the red.

State-owned BNFL's figures for the year to 31 March show a woeful catalogue of problems, with underlying operating losses trebling. That was blamed on lower prices achieved by selling its magnox reactor-generated electricity into a depressed market and increased maintenance and staffing costs.

The company also reported a charge of £415m for increased decommissioning costs on its power stations and a £230m hit on contracts to provide clean-up services to British Energy.

There was also a £175m hit for clean-up costs in contracts in the US, whose nuclear market is seen by BNFL as key to its future.

BNFL chairman Hugh Collum, the former GlaxoSmithKline executive brought in by the Government when it still had plans to privatise the company, remained resolutely upbeat.

Despite the Government's moratorium on the expansion of nuclear energy - which currently provides around 22% of Britain's electricity - Collum believes the UK and overseas governments will support the development of BNFL's Westinghouse AP1000 nuclear reactor, which it says is more efficient than older models.