Assessment of the Magnox North Limited organisational capability in support of decision to relicense Magnox South Limited sites to Magnox North Limited

Assessment of Magnox North Limited and Magnox South Limited organisational capability in support of:

A decision to relicense the Magnox South Limited sites to Magnox North Limited and;
Agreement to Magnox North Limited proceeding with associated organisational change proposals in accordance with its arrangements made under Licence Condition 36(1).

Permission requested

On 3rd September 2010, Magnox North Limited applied under the Nuclear Installations Act 1965 (as amended) for new nuclear site licences for the five Magnox South Limited sites. This is to facilitate restructuring of the management of the Magnox sites under one site licence company.

On the 13th December 2010 Magnox North Limited requested NII agreement to the management of organisational change supporting the integration of Magnox South into Magnox North and the creation of the Magnox Limited Board and Executive.

Background

Magnox North Limited and Magnox South Limited, both wholly owned subsidiaries of Energy Solutions Limited, are contracted by the Nuclear Decommissioning Authority to decommission the following nuclear power stations:

Hunterston A, Chapelcross and Trawsfynydd (operated by Magnox North).
Sizewell A, Dungeness A, Berkeley, Hinkley A and Bradwell (operated by Magnox South).

Additionally, Magnox North operates Wylfa and Oldbury nuclear power stations, which are currently generating electricity.

The Magnox companies wish to merge and, as a result, re-licensing of the five Magnox South sites is necessary in order that they can be brought under the same site licence company as the Magnox North Limited sites.

As part of its assessment of applications for replacement nuclear site licences, HSE’s Nuclear Directorate (ND) considers whether the applicant’s organisational capability remains adequate for it to manage nuclear safety effectively and discharge its obligations as a nuclear site licence holder.

Assessment and inspection work carried out by ND in consideration of this request

Magnox North Limited submitted an application under the Nuclear Installations Act 1965 (as amended) on 3rd September 2010 for replacement nuclear site licences in respect of each of the existing five Magnox South Limited sites. This was to facilitate the merger of Magnox South Limited into Magnox North Limited. At the point of relicensing, or shortly after, Magnox North will then be renamed Magnox Limited. On the 13th December 2010, and in accordance with its arrangements made under licence condition 36, Magnox North Limited requested ND agreement to proceed with the management of change supporting the integration of Magnox South Limited into Magnox North Limited and the creation of a new Magnox North Limited Board and Executive.

In consideration of this application, ND has undertaken assessment work as follows:

Specialist assessment of the Safety and Environmental Management Prospectus (SEMP) prepared in support of the licence applications.
Specialist assessment of licensee management of change documentation prepared to justify the safety of the proposed changes.

Matters that arose from ND’s work and outcome of ND’s consideration

There are some inconsistencies in the existing Magnox South Limited and Magnox North Limited arrangements for managing organisational change. Magnox North Limited is required to develop a single set of arrangements for use after relicensing which are consistent with ND expectations. These do not need to be completed prior to relicensing.

Conclusions

The ND assessment of the SEMP has not identified any issues which challenge a decision to relicense the Magnox South Limited sites into Magnox North Limited.

The ND assessment of the documentation prepared to justify the safety of the associated organisational changes has identified no issues which challenge a decision to agree to Magnox North Limited’s request to proceed with the management of change supporting the integration of Magnox South Limited into Magnox North Limited and the creation of a new Magnox North Limited Board and Executive.

The licensee has provided adequate responses to issues raised during the assessment.

Recommendation

The organisational capability of the combined Magnox North and South companies should be considered adequate to support a decision to grant replacement site licences to Magnox North Limited in respect of the five Magnox South Limited sites.
A Licence Instrument should be granted to agree to Magnox North proceeding with the management of organisational change proposal supporting the integration of Magnox South into Magnox North and the creation of a new Magnox North Limited Board and Executive.
ND should Approve the arrangements made under LC36(2) for all Magnox Limited sites when these are considered adequate, but this should not be a prerequisite for relicensing