Warhead factory's flagship construction project placed 'on hold'

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Delays Possible

NIS exclusive

A flagship £600 million construction project at the Aldermaston Atomic Weapons Establishment – the centrepiece of plans to rebuild the UK's nuclear weapons factory to manufacture the next generation UK Trident warheads - has been put on hold following a series of design problems, project management failures, and regulatory setbacks.

Work on Project Pegasus, a new facility under construction at AWE Aldermaston for manufacturing enriched uranium nuclear warhead components and highly enriched uranium nuclear submarine fuel pellets, is currently in limbo while AWE is “reassessing requirements for project delivery” and preparing a “revised scope and delivery schedule”, according to documents provided to Nuclear Information Service under the Freedom of Information Act (available to download at the end of this article).

As a result of the revelations former Armed Forces Minister Sir Nick Harvey MP has called for “question marks over the operational sustainability” of Project Pegasus” to be clarified and has written to the National Audit Office raising concerns about the scrutiny of high cost construction projects at the Atomic Weapons Establishment.

Because of the difficulties AWE is now faced with the prospect of extending the life of an existing facility originally built in the 1950s if uranium processing operations at Aldermaston are to continue.  The A45 uranium facility at Aldermaston is now nearly 60 years old and, according to the business case for Project Pegasus, is “incapable of meeting future capability and regulatory requirements”.

In August 2012 corrosion was found on the steel frame of A45, bringing fissile material manufacturing processes in the building to a halt while the building was surveyed.  A multi-million pound repair programme for the structure is now under way and even more money will have to be spent on refurbishment work if Project Pegasus is delayed.

A safety review conducted by the former Nuclear Installations Inspectorate (now the Office for Nuclear Regulation) in 2006 justified a further ten years of operation for A45, but concluded that by the end of this period a replacement uranium handling facility should have entered into operation. However, it appears that the replacement Pegasus facility will not now enter operation until 2018 at the very earliest.

The Treasury has approved spending of £634 million on Project Pegasus, which is currently under construction at the AWE site at Aldermaston in Berkshire.  These costs appear certain to increase as a result of the setbacks the project has experienced, and further costs are expected to result from the upgrade work needed to keep A45 open over the medium term.

Project Mensa, a £734 million scheme to build a new warhead assembly / disassembly facility at the Burghfield Atomic Weapons Establishment site, is also believed to be facing difficulties.  Changes to safety cases and associated documentation, combined with deviations from the originally scheduled programme, have resulted in difficulties in obtaining the necessary approvals from the Office for Nuclear Regulation (ONR), which is responsible for regulating nuclear safety standards for construction work at the Atomic Weapons Establishment.  The Mensa warhead facility was originally scheduled for completion by the end of 2015, but it appears unlikely that this target will be achieved.

The delays to Project Pegasus were revealed by ONR following a request for information about a review of the Project Pegasus construction timetable made under the Freedom of Information Act by Nuclear Information Service.  “Whilst ONR clearly have an interest in the outcome from this review we have not yet received an update from AWE regarding their revised scope and delivery schedule”, said a representative of ONR's Policy and International team.  “As such to-date we have not been able to generate any corresponding regulatory schedule”.

A safety report prepared by the ONR in 2013 to authorise construction of the facility's main enriched uranium store exposes a string of difficulties with design work for Project Pegasus.  The ONR report states that AWE's request to commence construction contained “a number of omissions”.  Some of the documents submitted “were not sufficiently developed” and some statements “were not sufficiently substantiated”. ONR wrote to AWE “expressing concern at the quality of the submission” and requested a re-submission which resulted in a four-month delay to the project.

ONR's assessment found that interface between mechanical plant and the built structure “may require further work”; “insufficient information” was provided on criticality incident detection; and “more evidence” was needed to support AWE's seismic analysis.  AWE's hazard assessment for the project needed to “clarify the scope of hazards assessed” and related only to “fairly generic and static events, without apparent consideration of the occurrence of such events with the most pessimistic operating and environmental conditions”.

A proposal by AWE to build the structure using welded pre-fabricated steel cages to reinforce concrete came out of the blue to ONR, who refused to allow the use of the welded cages until a safety case justifying their use had been submitted by AWE and approved.

ONR's assessment concluded that there were “numerous instances” where further information should have been included in the AWE's submission and that the company should ensure that future safety case submissions include a “comprehensive set of underpinning arguments and associated documentation”.

Following our FOI request Nuclear Information Service has been provided with notes from a joint meeting between AWE and regulators held in October 2013 to review the problems with permissioning for Project Pegasus.

The notes acknowledge that Pegasus permissioning “started later than planned” and “took longer than planned”, and outline a series of complications which caused the delays.  The Pegasus project had been “subject to a large number of changes from the start”, with problems compounded by issues with “continuity of senior management” and “senior management churn”.

There had been “a reluctance of AWE staff to talk with ONR”, as well as issues with organisation and communications between different disciplines within AWE.  Documents needed to be “of better quality” and ONR judged that AWE's request to start construction was “not appropriate”.

According to AWE insiders, Project Pegasus and Project Mensa have suffered from poor planning at the outset, with unachievable budgets and delivery schedules specified at the concept stages.  This has been compounded by errors in reporting and forecasting work progress.  The projects are said to have been run by inexperienced project managers and been over-reliant on contract employees.  Key strategic positions were held by contract staff, resulting in significant business risk.

There have also been serious questions over design standards.  A design contract for Project Pegasus with engineering consultants AMEC was terminated by AWE because of poor performance by AMEC.  A new company, Atkins, was subsequently brought in to handle the project but has apparently not succeeded in resolving the difficulties.  As yet, the design of the Pegasus facility is unable to handle plutonium contaminated enriched uranium feedstock from A45, meaning that the project does not meet a fundamental design objective.  AWE now has no option but to undertake extensive and costly refurbishment of A45 to prolong its life while going back to the drawing board to reconsider how to meet its enriched uranium processing requirements.

Much of the blame for difficulties with Project Pegasus and Project Mensa has been placed on Jacobs Engineering – one of the three parent companies in the AWE consortium, and leader of AWE's infrastructure upgrade programme.  The AWE contract is said to represent among the biggest profit margins within the Jacobs business portfolio, and the company has been accused of assigning inadequately skilled personnel with no track record of delivery - known within AWE project management circles as the “Jacobs mafia” – to manage projects at AWE.  According to insiders, “the entire Jacobs element in the AWE organisation represents a weak delivery element, with nobody of the calibre or credentials to run major projects”.

Campaigners say that MoD has been less than transparent in admitting that Project Pegasus has run into difficulties.  In response to a Parliamentary Question asked by Green Party MP Caroline Lucas in July 2014 – eight months after AWE met with regulators to discuss permissioning concerns – Defence Minister Philip Dunne stated blandly that Project Pegasus was “under regular review” and that “no changes to the approved scope of the project” had been made.

Project Pegasus and Project Mensa are both part of the Nuclear Weapons Capability Sustainment Programme – a secretive Ministry of Defence programme of investment at the Atomic Weapons Establishment aimed at ensuring the Establishment retains the capability to develop and manufacture nuclear weapons into the middle of the current century.  Under the programme, which commenced in 2005, spending at the Atomic Weapons Establishment has risen to around £1 billion per year, half of which is capital expenditure on new buildings and facilities.

Yet, unlike other major MoD spending programmes, the Nuclear Weapons Capability Sustainment Programme is not scrutinised as part of the annual review of Defence Major Projects conducted by the National Audit Office.  Oversight of the project beyond the MoD takes place only behind closed doors by HM Treasury's Major Projects Review Group as part of the broader management arrangements for the Trident replacement programme.

A report prepared in September 2013 by a special team set up to review difficulties with projects at AWE was sent to Bernard Gray, Chief of Defence Materiel, who was appointed by the Coalition government to head up the Defence Equipment and Support organisation and improve management of the MoD equipment programme.  The MoD has so far refused to release the report, despite requests made under the Freedom of Information Act, claiming that release of the report would compromise commercial interests and the formulation of future government policy.

Significant sums of money have been written off on previous occasions on construction projects at the Atomic Weapons Establishment which have failed to deliver.  The small print of the MoD's annual report and accounts for 2010-11 revealed that up to £120 million may have to be written off as a result of the termination of Project Hydrus – a research facility for conducting hydrodynamic experiments which was cancelled following the Coalition government's Trident Value for Money Review in 2010.

In 2006 the House of Commons Defence Committee declared itself “amazed at the scale of the losses” on an abandoned project to construct a new waste treatment plant at AWE Aldermaston.  Costs of £147 million were written off by the Ministry of Defence following failure to deliver the A91 waste treatment plant project in the 1990s.  Many of the mistakes made during the A91 project appear to have been repeated during the planning and execution of Project Pegasus.

Liberal Democrat MP Sir Nick Harvey, a former Armed Forces Minister told NIS “The necessity for value for money across all public projects combined with a lack of broader scrutiny in the nuclear sector means the need for proper audit is more important than ever. After all, this area is not a competitive market.
 
“We do need some clarification into the status of Project Pegasus. The current enrichment facility has a limited life and there are already some question marks over its operational sustainability: any delays to the new facility will put further pressure on.
 
“I have tabled some questions to the MOD and written to the National Audit Office asking them to consider broader scrutiny of the Nuclear Weapons Capability Sustainment Programme. Billions of pounds of public money are going into the programme, so it is only right that we have a clear idea of where this extensive work is at.”

Read the documents released to Nuclear Information Service under the Freedom of Information Act here:

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