Rolls-Royce wins leading role in multi-billion-dollar nuclear decommissioning contract in Canada

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Rolls-Royce has won a leading role in a multi-billion-dollar nuclear decommissioning contract in Canada – prompting speculation the engineering giant will launch another assault on the lucrative British market.

The company tried to crack the UK market by bidding for the £7bn clean-up of historic Magnox reactor sites, from Hunterston in Ayrshire to Dungeness on the Kent coast. But a team including Rolls-Royce lost out to a joint venture led by British rival Babcock International and the US engineer Fluor last year.

Rolls-Royce has been quiet about its role in the contract to detoxify Chalk River Laboratories in Ontario. The reactor that is central to the site started up in 1957 and is due to shut down in three years’ time. A consortium called the Canadian National Energy Alliance (CNEA) has been named preferred bidder on the deal.

This alliance includes Montreal-based SNC-Lavalin; CH2M Hill, the Denver group that owns British engineer Halcrow; and Utah’s Energy Solutions, which has previously led decommissioning of Magnox sites. Rolls-Royce will be a sub-contractor, building metal components and machines for the contract at its factory in Peterborough, Ontario.

Although the company argues that the job should not be interpreted as the start of a renewed attack on the nuclear decommissioning market, industry experts believe the win is a clear signal of intent.

A nuclear engineering source said: “This is a big deal and really good news – I’m surprised the chief executive [Warren East] didn’t mention it at Rolls-Royce’s interim results. This is a significant departure from their traditional business model.”

A Rolls-Royce spokesman said: “The competitive process is not complete until the share transfer has taken place, so it is inappropriate for us to comment at this stage. However, we can confirm that Rolls-Royce will not form part of the CNEA joint venture. Our role is as a key sub-contractor to the main joint venture contract with the Canadian government.”