In January 2020, the National Audit Office (NAO) in the UK issued a report in which it said the Ministry of Defence’s ‘poor management’ of three critical infrastructure projects on its nuclear-regulated sites has contributed to a combined cost increase of £1.35 billion and delays of between 1.7 and 6.3 years.
The NAO said that, after problems in the early stages of the projects, the Ministry of Defence has made progress, with some of the construction now complete. However, it still needs to manage the remaining commercial risks and learn the lessons for future projects.
The three projects are:
MENSA: a new nuclear warhead assembly and disassembly facility, valued at £1.8 billion, at the Atomic Weapons Establishment (AWE)-operated site in Burghfield, Reading.
Core production capability (CPC) facilities: upgraded facilities, costing at least £474 million, at the Rolls Royce-operated site in Raynesway, Derby to produce the latest nuclear reactor core designs.
Primary build facility: new facilities at the BAE Systems-operated dockyard in Barrow-in-Furness, Cumbria, costing £240 million to upgrade aging facilities and support improved submarine construction techniques.
“Along with the risks inherent in all major infrastructure projects, there are unique challenges with these projects,” said the NAO. “They include the need to comply with additional nuclear-related regulations, the limited pool of suppliers and the complexity of the designs. Problems in the earlier and riskier stages of these projects have caused delays and cost increases.
“Some of the designs may have been more costly than necessary, mainly as a result of construction starting before the requirements or designs were fully developed, and changes to the project management or commercial approach. The way that the Ministry set up the contracts also means that it, and not its contractors, must foot the bill for these cost increases as it did not share out the financial risks.”