Find funds for Forgemasters, government told

Tuesday, 14 December 2010

The UK government should continue to try to find funding for Sheffield Forgemasters' planned 15,000 tonne press, according to a select committee of members of parliament. The report also criticises the decision to withdraw a government loan from the project.

The Business, Innovation and Skills Committee is drawn from MPs from across the political parties and tasked with examining the expenditure, administration and policy of the Department for Business, Innovation and Skills (DBIS). Its report today considers the UK government's reasons for deciding to withdraw an £80 million ($118 million) loan from the project in June 2010. The loan would have played a vital role in the construction of the press, which would have been capable of producing the largest forgings needed for reactor pressure vessels. Few plants anywhere in the world have such large scale capacity.

   

"We urge the    government to   continue in its efforts    to secure funding for   this project - whether   by public or private   funds - so that an   opportunity to take a   lead in this important   industry is not lost."      Business, Innovation     and Skills Committee

The decision to withdraw the loan was made following general elections in May 2010, when the UK's newly elected coalition government was faced with finding savings on a massive scale. The select committee has now taken issue with the DBIS's claims that the decision to withdraw the loan was made on grounds of affordability. It is also critical of the lack of a cost-benefit analysis behind the decision over which of a number of projects promised government funds should be cut.

 

According to the select committee, the Forgemasters loan appears to have been identified as an "easy cost saving". It adds that the DBIS "should have been more transparent in articulating this process and not hidden behind the simple defence of affordability." The committee's report goes on: "Furthermore we did not receive any detailed explanation of how the Sheffield Forgemasters project was chosen ahead of the other non-contractually committed projects sponsored by the department."

The loan in its existing form will not be reinstated, the committee notes. Nevertheless, the project is of too much importance not to be pursued further. "The establishment of such a large press would have enabled the United Kingdom to take a significant lead in this important industry. For that reason we urge the government to continue in its efforts to secure funding for this project - whether by public or private funds - so that an opportunity to take a lead in this important industry is not lost," it notes.

"Should the company make a further application, we would expect the secretary of state to honour that undertaking," the report states, referring to a pledge made in the wake of the loan cancellation by UK business secretary Vince Cable that a fresh loan application would be considered by the government when funds should become available. The select committee suggests funding could potentially be made available either through the recently established Regional Growth Fund or the Green Investment Bank.

The government loan, which was to have been in the form of a credit facility from the UK's Strategic Investment Fund, would have provided the majority of the £140 million ($207 million) cost of the project. The remainder was to be funded largely by Forgemasters with US reactor vendor Westinghouse contributing to the project.

Forgemasters is due to review the 15,000 tonne press project early in 2011.

 

Researched and written

by World Nuclear News