Bnfl Learns To Count – British Nuclear Fuels

Bnfl Learns To Count – British Nuclear Fuels – Brief Article

British Nuclear Fuels’ new-look accounts will help the government go ahead with its plans to privatise the company by 2002.

Through a careful presentation of its accounts, BNFL has transformed this year’s [pounds]62 million operating loss into a [pounds]228 million pre-tax profit. This magician’s feat has been achieved by including the interest earned from up-front payments for future work and a huge cash pile stored up to deal with later decommissioning costs as ‘financial income.’ ‘It’s remarkable,’ says nuclear economist Gordon MacKerron of Sussex University. ‘I don’t think it will fool anyone into thinking that the business is viable as an operation. These earnings are simply the product of managing funds received through historical circumstances. The fact remains that the company is operating at a loss.’

BNFL’s nest egg includes a [pounds]2.6 billion cash payment to cover future decommissioning costs that it was given when it bought Magnox nuclear power stations in 1998, as well as a [pounds]3.7 billion IOU from the Government. MacKerron criticised BNFL for crediting its accounts with [pounds]249m of this IOU, despite the fact that the government has not yet paid over the money.

Earlier this month, BNFL’s accounting practises were firmly denounced by Martin O’Neill, chairman of the influential Commons Trade and Industry Select committee. He condemned the ‘Byzantine complexity’ and lack of transparency of the company accounts and promised to pull BNFL up before the government’s auditing body, the National Auditing Office, if things don’t improve.

Although BNFL may yet pull off its privatisation, as it stands the group ‘would not be a good financial investment,’ says Greenpeace’s nuclear campaigner Bridget Woodman. ‘What they should do is move out of reprocessing and into waste management and clean up. That is where their prospects lie.’

COPYRIGHT 2000 MIT Press Journals

COPYRIGHT 2001 Gale Group