Watchdog MPs demand tighter cost controls on Sizewell C

Watchdog MPs have demanded tighter oversight of Sizewell C construction amid warnings that taxpayers and consumers are carrying most of the financial risk.

The Public Accounts Committee branded plans for annual progress reports to Parliament “totally inadequate” for the £40.5bn–£47.7bn nuclear project.

It wants six-monthly updates setting out actual and forecast costs, changes to the construction timetable and progress against key milestones.

These should also reveal the expected impact on energy bills and investor returns, alongside findings from independent technical advisers.

MPs warned that gaps between reports could leave emerging construction risks hidden for longer, making problems more expensive to tackle.

They also demanded immediate notification if cost or completion forecasts become unreliable, or significant design changes threaten the budget or programme.

Construction is expected to finish between 2039 and 2043. But the committee warned that no comparable nuclear power station anywhere in the world had been built on time and to budget.

The Government is relying on a more mature design and lessons transferred from Hinkley Point C to break that record. Sizewell C’s design is expected to be 85% the same as the completed Hinkley design.

But MPs said the project remained highly complex, with substantial uncertainty over costs and delivery.

Their report raised particular concerns over a funding deal that leaves the Government with a minority shareholding while taxpayers and consumers provide most of the money and bear most of the risk.

If construction costs rise from £40.5bn to £47.7bn, private investors would have to contribute just £30m more in cash.

Consumers would pay an extra £9.8bn during construction and a further £12bn over the plant’s 60-year operating life through energy bills, in real terms.

Those payments would cover the additional construction cost and higher payments to lenders and shareholders.

Investors’ annual returns would fall by up to 1.6 percentage points but remain above 10%, prompting MPs to question whether the deal provides strong enough incentives to control costs.

The committee also warned that the Government’s ability to intervene directly could be constrained by a delivery company majority owned by private investors.

Ministers are relying on government representatives on the company’s boards to protect the public interest. But MPs said they were less confident this influence would always be sufficient.

PAC chair Sir Geoffrey Clifton-Brown said: “The high level of risk borne by taxpayers and consumers for the construction of Sizewell C is extraordinary. Private investors look set for significant returns on their investments, while customers are likely to be saddled with higher energy bills.”

He added: “The government must focus on the successful delivery of this project, not just of a new nuclear power station, but of a commercially derisked nuclear sector for a taxpayer that should never be put in this position again.”

The committee wants ministers to spell out how they will protect taxpayers and consumers and strengthen the link between investor returns, delivery performance and financial risk on future nuclear schemes.

MPs also demanded safeguards to ensure Sizewell C meets its target of spending 70% of its construction budget in the UK and that associated jobs remain in the country.

Watchdog MPs demand tighter cost controls on Sizewell C | Construction Enquirer News