DOE will pay contractor $548 million for Idaho plant.
(Photo courtesy of BNFL)
Cleaning up contaminated
sites and troubled cleanup contracts is costing the U.S. Dept.
of Energy more these days. DOE has agreed to pay BNFL Inc.
up to $550 million to resolve outstanding contract issues
at two former weapons production cleanup sites, just as the
Bush administration has proposed cutting the agencys
fiscal 2006 cleanup budget by a nearly equal amount.
The deal was negotiated between
DOE and the Fairfax, Va.-based firms owner, the U.K.s
Dept. of Trade and Industry. Under the settlement, DOE will
pay $428 million to purchase the Advanced Mixed Waste Treatment
Facility, designed and built by BNFL at the Idaho National
Laboratory under a 1996 contact. BNFL financed the plants
$570-million construction. Under the original contract, it
was to recover those costs in increments as it retrieved and
processed 65,000 cu meters of transuranic waste at the site.
"We thought $428 million was fair reimbursement for the
plant considering the cost of money over time,
a company spokesman says.
Another $50 million in the agreed
amount was to settle $250 million in outstanding BNFL claims
for both the Idaho project and a decontamination and decommissioning
contract to clean up three gaseous diffusion plants at Oak
Ridge National Laboratory in Tennessee. The firm can earn
up to $75 million in performance incentives to meet operational
milestones before the Idaho plant is turned over to DOE in
May. That would bring the total to $550 million.
The BNFL agreement was announced
just two days after the administration proposed budget cuts
for DOEs cleanup program. That would chop 7.8% out of
last years $7-billion environmental management funding.
The largest cut comes out of the
agencys Hanford site in Washington state, its most contaminated
former nuclear weapons site. Hanford would receive $1.8 billion
for fiscal 2006, some $267 million less than last year.
Rep. Jay Inslee (D-Wash.), says
the cuts are a huge problem. "We are very concerned,"
he says. New Energy Secretary Samuel Bodman says the budget
was cut because cleanup is winding down. But contractors disagree.
"The president has obviously decided that environmental
management...will be used to balance the budget,
says one DOE contractor.
Some say the cuts are just a starting
point and that Congress will see to it that some funds are
restored. "There is still mileage in front of us. I hope
we can recover, one contractor says. But others
disagree. "The administration needs the money and they
found [something] they can cut that wont backfire on
them, says a former DOE official.
DOE held a closed meeting with
contractors to prepare them for the proposed cuts, which could
reach $100 million or more to some larger players. But there
are no leaks from the meeting. "They made it clear they
would cut our throats if we talk about this, one