Doubts have been raised over the fate of a new nuclear power station planned for Cumbria after it emerged that most of the project’s 100 UK staff had been laid off.
Toshiba has been trying to sell the NuGeneration consortium behind the Moorside plant since it had to write off billions of dollars because of problems with its US nuclear business last year.
The Korean state-owned firm Kepco appeared to swoop to the rescue last December by agreeing to buy NuGen but the sale, which was meant to complete this January, was then delayed until the spring. The transaction has still not closed, and uncertainty has been created by a change of government in Seoul and the appointment of a new Kepco chief executive.
The delay has forced Toshiba, a Japanese corporation, to look again at the consortium’s running costs, leading to a decision on 27 July to cut many of the venture’s 100 jobs across Manchester and Cumbria. The job losses will be subject to consultations.
Toshiba is believed to have spent hundreds of millions of pounds developing the project so far. In a statement NuGen said: “It has been decided by the NuGen board to re-profile the organisation at this point in order to pursue alternatives.”
It remains unclear whether the South Koreans will go ahead with a deal that looked a certainty last year. Kepco officials are due to arrive in the UK on Monday, and the UK government has been in talks to save the deal. A source close to the process said: “The Kepco deal is not dead yet.”
If the acquisition were to collapse the failure of the Moorside project would leave a large hole in ministers’ wishes to encourage the construction of as many as six new nuclear power plants to meet climate goals.
Unions said the problems showed that a recent sector deal between government and industry did not got far enough to ensure nuclear installations were built.
Sue Ferns, senior deputy general secretary of the union Prospect, said: “Despite the welcome nuclear sector deal it is increasingly clear that the government needs to do far more to reassure the nuclear industry and support them in developing the next generation of low-carbon energy sources in the UK.”
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “We continue to engage with new-build developers, though the detail of these discussions is commercially confidential.”