The Ministry of Defence’s (MOD) management of critical infrastructure projects on nuclear-registered sites has led to a combined cost increase of £1.35bn and delays of 1 to 6 years according to a report from the National Audit Office (NAO).
The NAO said that despite construction for some of the projects being completed the delays were largely down to problems and failures in the early stages of development, despite this MOD still needs to curtail further risks and learn lessons from the projects faults.
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The projects which will provide key support to the UK’s continuous-at-sea nuclear deterrent have a combined value of at least £2.5bn and cover three sites across the country. None of the three projects reviewed by the NAO are on schedule or on budget.
MENSA, a new nuclear warhead assembly and disassembly facility worth £1.8bn at the Atomic Weapons Establishment (AWE)-operated site in Burghfield. The project was started in 2011 and is expected to be completed in 2023 has seen a delay of 6.3 years, with the facility currently being fitted out. The projects forecast of £1.8bn is almost 150% more than the original expected cost of £734m in 2011.
The delays have also led to costs elsewhere with the MOD having to upgrade existing facilities to comply with regulations. The NAO report says that between 2016-17 and 2019-20 the MOD has spent £21m to be able to continue to use the Burghfield site.
Another project to develop Core production capability facilities at Rolls Royce site in Raynesway designed to manufacture the nuclear reactor cores for the Dreadnought-Class of submarines was started in 2012 current forecast cost is £474m, up from £328m forecast when the project began with construction yet to begin on the second part of the facility. This project has seen a delay of just over five years.
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By GlobalDataThe third, a primary build facility at BAE Systems Barrow-in-Furness shipyard has also been delayed by almost 1.7 years. Expected to be finished in 2022 the £240m facility has seen its forecast cost more than double from the £111m initially expected. The facility is designed to allow the UK’s Dreadnought Submarines to constructed using a modular technique.
The NAO said that £647m of the total cost increase was a result of the MOD starting construction on the projects too early. The projects represent 24% of the MOD’s 52 current Nuclear Enterprise infrastructure projects across the UK by value.
NAO head Gareth Davies said: “While these infrastructure projects are complex, the MOD has encountered similar challenges before in its nuclear work. Although it has recently introduced changes to enhance its oversight of the projects and improve its contracts with suppliers, it should have learnt earlier from past mistakes and the experience of others in the nuclear sector.
“Instead, the MOD’s failure to mitigate commercial and delivery risks early on has led to project delays and cost increases, as well as impacting its wider work.”
The construction of nuclear facilities has a number of inherit risks alongside those that are commonplace in infrastructure projects. Facilities on nuclear-regulated sites need to comply with additional regulations and guidance and can only be delivered by a small number of suppliers.
The NAO explained that “problems in the earlier and riskier stages of these projects have caused delays and cost increases.” The MOD has had to foot the bill for the expanded costs as the contracts mean the ministry, not the contractors bears the financial risks.
In the report, the NAO criticised the MOD for not learning from past problems with similar projects. The report says: “The MoD could have learnt more from the early stages of other nuclear infrastructure projects concluded in the UK and elsewhere. Similar challenges arose for the MoD in the 1980s and 1990s, as well as in American defence projects and UK civil nuclear projects, such as at Sellafield.”
Responding to the report a spokesperson for the MOD told Naval Technology: “As the National Audit Office has acknowledged, nuclear infrastructure projects are often large and complex with niche designs. We are carefully examining the conclusions in their report and will respond formally in due course.
“We are committed to strengthening the management of nuclear programmes, including investing significantly in infrastructure and working closely with regulators and industry partners.”
