Whitehall officials are concerned about the spinoff of an important business worth £3 billion that provides services to Britain’s nuclear infrastructure and defence.
It is believed that the Cabinet Office met with the CEO of US engineering giant Jacobs in March, when Jacobs announced its intention to split its “critical mission solutions” (CMS business). This operation helps to build the Hinkley Point C nuclear reactor in Somerset. The company also manages the waste and decommissioning of Sellafield’s nuclear site, and it has managed projects at AWE Aldermaston – a nuclear weapons facility.
Gareth Rhys Williams met with Bob Pragada, the Jacobs CEO, last month in order to get assurances that spin-offs would not impact the government’s contracts.
Jacobs has decided to spin-off its multinational CMS business in order to focus on more lucrative consultancy work. Uncertain whether the spin-off will be a public stock market listing or a sale. McKinsey may be leading the spin-off.
Sources in the industry suggested that the separation of CMS might have implications for national safety, due to the sensitive nature its contracts. This is especially true if the company were purchased by a foreign buyer.
Jacobs stated: “While we won’t comment on specific meetings, Jacobs remains extremely confident in his ability to deliver on our promises to all of our clients while maximising the value for all stakeholders.”
Cabinet Office: “We meet regularly with strategic suppliers to monitor their performance and to discuss any changes in their business.”
Energy secretary Grant Shapps is also scheduled to give an update this week on Great British Nuclear. The company is holding a competition for developers of small modular nuclear reactors. The report is expected to present a dual-track project approach, involving a first phase of traditional designs that will be followed by “advanced modular reactors”.