NUCLEAR power group British Energy yesterday admitted that the cost of repairs at two of its reactors had spiralled beyond initial £50 million estimates.
Delays and complications at the Hartlepool and Heysham 1 plants will be "significantly higher", the company conceded.
Chairman Sir Adrian Montague told the group's annual general meeting in Edinburgh that there would be "slippage" in the programme
to repair the units, which have been shut down since October of last year.
Repairing corroded equipment at the sites will mean they will now not be operable until the third quarter of 2008, further hitting income at the East Kilbride-based energy group.
Montague told shareholders: "This is a complex project involving many engineering disciplines (and] a variety of contract partners, and now we anticipate, given this complexity, that there will be some slippage in our programme."
Although he did not say how much more the project will cost, there have been estimates that the price tag could be more than double.
A spokesman for the group last night added: "With electricity prices rising, British Energy recognises the importance of bringing the two stations back online, therefore much of the additional costs associated with this project are to do with the additional manpower required to complete the work safely and within a reasonable timescale."
Montague said the group would give a further update on costs when they reveal first-quarter results on 13 August.
At a low-keymeeting at Murrayfield, Montague told a small group of shareholders the project had soaked up more that one million man-hours.
Montague remained tight-lipped on possible takeover of the company – French firm EDF and the newly former GDF Suez firm have been mentioned as possible bidders.
Montague said only that "discussions with a number of interested parties" were continuing.
He confirmed that among the takeover proposals they received last month, none "represented fair value".
It is believed that last month BE's board rejected an estimated £11bn offer from EDF although they are still in negotiations.
During the meeting, Montague did not use the word "sale" or "takeover", but said the company was looking for "partnerships" – fuelling speculation BE may instead be looking to form joint ventures to build new nuclear power stations rather than risk a sale that undervalues the company.
"There may be quite a wide range of partnerships proposed to us," said Montague.
He emphasised that BE's current nuclear sites "were not just real estate" but "priceless assets". Although most of its nuclear sites, with the exception of Sizewell B, are second- generation advanced gas-cooled reactors on the verge of being decommissioned, their sites are probably the only places new nuclear will be built in Britain.
Last year BE announced it was to extend the life of two of its nuclear power stations, Hinkley Point B in Somerset and Hunterston B in Ayrshire, a further five years to 2016.
Since Gordon Brown gave the nod last year to a new generation of nuclear power reactors, BE has begun community consultations with a view to building a new reactor beside Sizewell B in Suffolk, and they are planning similar meetings at Hinkley, Dungeness and Bradwell.
The Scottish Government last year ruled out any new nuclear power stations in Scotland, saying they were "dangerous and unnecessary".
BE owns and operates eight nuclear power stations. In Scotland they have Torness in East Lothian and Hunterston B in Ayrshire. English sites include Dungeness B in Kent; Hartlepool in the north-east; Heysham 1 and 2 in Lancashire; Hinkley Point B and Sizewell B in Suffolk. It also owns a coal-fired power station at Eggborough, East Yorkshire.
British Energy's share price fell 1.7 per cent to 710p.
The full article contains 626 words and appears in The Scotsman newspaper.
