Brain Wilson & Wendy Alexander
Decommissioning A Huge Opportunity
30 August 2001


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Scottish Ministers Visit Doureay
Opportunities for the whole of Scotland and particularly Caithness and the Highlands In One of the Biggest Government Spends After Defence.

Brian Wilson, the UK Minister for Industry, energy and Environment and Wendy Alexander, the Scottish Executive Minister for enterprise and Lifelong Learning visited Dounreay today Thursday 30 august 2001.  Their visit followed discussions in Thurso with senior figures from the highlands and Islands Enterprise Network about the potential for economic development arising from the decommissioning opportunities at Dounreay.

Ministers At Dounreay

The ministers want to put Dounreay at the heart of a world class decommissioning industry and see the potential in building up the expertise of the population similar to that which has already happened in Grampian around the oil and gas industries.  The ministers toured the site and met local economic development agencies, senior management and trade unions to discuss future prospects.

Brian Wilson stressed that the decommissioning project was the largest of the decade and that large benefits could accrue to Caithness, the Highlands and the whole of Scotland.  Whilst agreeing that many of the major contracts would go to some major world class firms there was plenty of work and contracts that should be available to local Highland firms especially as sub-contractors.

the UKAEA estimates the work will take 50 - 60 years to completely decommission the site at a cost of 4 billion.  Over the next 20 years up 20 new plants will need to be built to treat a legacy of radioactive materials and wastes creating substantial additional employment opportunities during construction.  There was  huge potential in the next few years as many aspects would be front loaded with high spends in the early years of the programme. Dounreay could be an undisputed force for good with benefits all round. Wendy Alexander saw Caithness as having the chance to become expert in decommissioning.

Neil Money To Lead New Task Force
The importance of the project was reflected in her announcement about Neil Money stepping down as chief Executive of Caithness and Sutherland Enterprise to take on responsibility for the new HIE Network Dounreay Decommissioning Strategic Response Task force.  Other members of his team will be announced later.  Neil money said later that the decommissioning was the greatest opportunity ever for Caithness - possibly even greater than the development of Dounreay itself.  The chance to develop a new area of expertise leading to numerous possible spin offs for Caithness and the Highlands.  His job would be to try to make sure that the opportunities were realised.  Neil Money has been on 6 month secondment studying the possible economic aspects for Caithness and the highland economy.

The Past
In 1988, when Cecil Parkinson announced the closure of the fast reactor in 1994 and the fast reactor reprocessing plant in 1997, it was predicted that jobs at Dounreay would drop from 2110 to 530 and unemployment in Thurso would rise to 36.7 per cent.  

What happened?   The Government allowed UKAEA to make up the loss of state funding by using its plants for commercial work in fuel fabrication and reprocessing.  Nevertheless, total employment at the site did fall to as low as 1100.   UKAEA concluded the business was not viable and in 1998 Donald Dewar and John Battle announced that no more commercial reprocessing would be sought at Dounreay.


Looking at The Current Set Up

The decision allowed UKAEA to focus on what needed to be done to decommission the site. Shortly afterwards, NII and SEPA carried out a safety audit and made 143 recommendations. One of them was that too many staff had been allowed to leave and not been replaced; another was the need for an integrated decommissioning plan for the site.

Staff Increases
UKAEA started a major recruitment drive to undertake the decommissioning work and in October 2000 published the integrated site restoration plan, which describes some 1500 interdependent projects required to decommission the site. Employment levels at Dounreay have risen to 2000 people, with about 1000 working for UKAEA and 1000 for contractors. UKAEA has recruited 250 staff since 1998 and is recruiting an additional 200 staff this year.

The site restoration plan envisages the level of employment remaining steady at more than 2000 for the next 15 years or so. Spending at Dounreay is now running at 140-150 million a year, almost double the level during the mid-1990s. Of this, some 61 million is injected into the Caithness economy (23m in net salaries, 4m in pensions, 4 million in contracts and 30m in sub-contracts).

UKAEA estimates it will take 50-60 years to completely decommission the site at a cost in the region of 4 billion. Over the next 20 years, up to 20 major new plants will need to be built to treat a legacy of radioactive materials and wastes, and this will create substantial additional employment during construction. All major radiological hazards should be dealt with by 25 years, after which spending and jobs will decline. 

Unemployment Lowest in Living Memory in Thurso Area
Unemployment in Thurso now stands at 3.1 per cent ? the lowest level in living memory and is falling.  House prices are rising rapidly as skilled staff and their families migrate to Caithness, although the perception in the south that Dounreay is closing down can be a deterrent to recruitment.

Population Stabilised
Caithness (pop. 26,000) had faced serious demographic problems during the 1990s and was alarmed by forecasts that out-migration would lead to the loss of 30 per cent of young people by 2015 or so. Dounreay is now being marketed as a career opportunity for young people once again. The Local Plan published by Highland Council predicts significant socio-economic growth in Thurso as a result of the decommissioning work. New housing estates, an expansion of the business park and new road links are proposed. Are local firms benefiting or is all the work going to national companies?

During 2000/01, Dounreay spent 80 million on contracts. This was divided among companies in Caithness (4.2m), the rest of the Highlands and Islands (0.6m), the rest of Scotland (8.5m) and England (66m). However, Caithness firms also picked up some 30m in sub-contracts.  

Local Firms Can Increase Their Share Of The Work
Local firms can pick up a larger share largely through sub-contracts with the big firms who undertake the major decommissioning projects. The small share of work currently going to the rest of the Highlands and Islands is another potential growth area.  A good example of a local firm that's thriving is the engineering company JGC Engineering and Technical Servivces, a third-generation family firm at Harpsdale which has become a key player in alliances to decommission both fast reactors at the site.  UKAEA is working closely with HIE and CASE to develop opportunities for firms in the Highlands and Islands. By building up their strength through sub-contracting for multi-nationals, other local firms will develop the potential to export their skills to decommissioning projects elsewhere.

Investment
Investment on the ground is beginning to materialise. Motherwell Bridge have opened a training centre in Thurso, numerous branch offices are opening up and Hertel have acquired the former US Navy base at Forss for contractor support facilities. The French company Framatome, which is part of the fast reactor decommissioning alliances, are undertaking a skills transfer with JGC and want to extend their educational partnership with colleges in France and Germany to the North Highland College.  An off-site trials facilities is also being developed on the outskirts of Thurso and may provide additional training benefit through UHI.  European funding was secured for the college to run a "safety passport" training initiative for contractors' staff.

UKAEA Links
UKAEA is developing closer links with the planning and development department of the Highland Council to:

- Prepare for a spate of major on-site planning applications expected over next few years

- Understand the socio-economic impact on the community and local infrastructure.

Local Plan
The new Local Plan recognises that infrastructure, such as roads, may need improved to enable full decommissioning. UKAEA is preparing an Environmental Statement and Land Use Plan for the Dounreay Site Restoration Plan which will detail the impact.

Aspects.
The famous Ball which has been closed for many years will be cleaned up and this work will take up to 25 years.  It is just one part of the site which will be completely restored and made safe.

The ministers later visited the Battery Factory just outside Thurso where another new contract has just been announced.