If the MOX Project has its funding cut by 50 percent in the FY 14 budget, as many have said is likely to happen, this could put the entire project in danger.
“It would be a big challenge for us,” Kelly Trice, Shaw AREVA MOX Services president and COO, said in a conference call with press on Thursday.
“Hypothetically, if we faced a 50 percent cut, the structure itself would remain in tact,” Trice said. “The effect would be on equipment being fabricated in 40 states around the country.”
The impact on the workforce, which numbered around 2,300 this morning, would be “big,” he said.
“It would be a big impact, but I couldn't give you a number,” Trice said, adding later that there is such uncertainty in his highly trained workforce that they already are losing people. “I have had people resign due to the news,” he said. “In fact, I had an engineer resign yesterday ... to go to a project in Alaska.”
Trice explained that despite the below-freezing temperatures at the Alaskan project, the uncertainty at MOX meant the engineer's decision was made on job security rather quality of life.
A significant cut in funding or delay in the project, as it stands, would leave an 80-foot-tall, multibillion dollar building with 110 holes in it, at the mercy of the elements. Beyond this are significant amounts of equipment that need regular maintenance and 400 outstanding contracts, to contractors in 40 states, valued around $500 million to fabricate equipment, which would have to be paid off.
However, Trice said he remains confident and believes that the administration supports the project and the funding would be made available. But that he had not seen the FY 14 Budget, due to be announced next week.
Trice spoke on a press call Thursday to promote the construction milestone of the roof of the facility being completed.
“The completion of the roof and the exterior structure is an important milestone in the progress of MOX construction,” said Kelly Trice, president and chief operating officer of Shaw AREVA MOX Services, which is designing and constructing the facility. “We have much more work to do as we move to the next phase of the project, focusing on interior construction and equipment installation. Our 2,400 team members, and more than 1,000 suppliers from across the country are proud to be a part of building this first-of-its-kind nuclear facility for our country's national security.”
Despite the specific focus of the call, it was dominated by financial considerations and the future of MOX.
The jump in the cost of the now $7.7 billion plant has been a major focus of questions, and attacks, in recent months. Asked if the contractor was to blame, Trice admitted there was room for improvement with his company.
“Certainly there are areas we could have done better, I cannot dispute that,” he said.
However, he gave many other reasons for the need to re-baseline the project. Trice said the MOX Project was baselined in 2005, and, as a one-of-a-kind plant, the availability of suppliers able to meet their needs was not there. He added that Shaw Areva MOX Service had to “embed” people in contractors and suppliers to make sure their demands were met.
He also admitted that the plant “design was relatively immature” due to its uniqueness. He also mentioned the competition from other nuclear operations for labor and resources and price escalation.