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US: Cost likely to rise for Hanford waste plant construction

A U.S. Army Corps of Engineers report concludes there is a significant risk of construction cost increases for the Hanford nuclear site's waste treatment plant, the government's largest construction project.

The report was requested by members of the U.S. House, which approved full funding for Hanford cleanup as part of a major spending bill last week despite the study's conclusions. But lawmakers noted in the bill that the corps report reveals that the "uncontrolled cost growth" for the project also is apparent at other sites managed by the U.S. Department of Energy.

For 40 years, the Hanford reservation made plutonium for the nation's nuclear weapons arsenal. Today, work there centers on a $50 billion to $60 billion cleanup, to be finished by 2035.

About 53 million gallons of highly radioactive waste from World War II and Cold War-era plutonium production sits in 177 aging underground tanks at Hanford, less than 10 miles from the Columbia River. The waste treatment plant will use a process called vitrification to turn most of the waste into glass logs for permanent disposal in a nuclear waste repository.

Plant construction was estimated at $4.35 billion before the contract was awarded in 2000. The current estimate is close to $5.7 billion, an increase of more than 30 percent.

"The committee has little confidence in the accuracy of the current cost and schedule baselines for these projects and even less in the ability and motivation of DOE and its contractors to control these costs," the bill said.

Erik Olds, spokesman for the Energy Department's Office of River Protection in Richland, said the agency has worked to greatly refine cost and schedule estimates for the waste treatment plant in the past two years, as well as the frequency and quality of its briefings to Congress.

"We have also provided the final corps report to our contractor and will be looking for any opportunities presented in that report to continue the quality of our cost and schedule estimates," he said Friday.

About 1,700 people have been working to build the plant, which will stand 12 stories tall and be about the size of four football fields when completed. Bechtel National is the contractor.

The plant is being designed as it is being built, and the Energy Department has said improvements to meet regulatory deadlines altered the design.

In a recent tour of the construction site, John Eschenberg, project manager for the River Protection Office, noted that only 10 percent of the building's design was complete four years ago. By the end of this year, the design is expected to be 75 percent complete, he said.

The plant is scheduled to be running by 2011.

"With each increment of design completed, you gain more precision in estimating the costs to build," Eschenberg said. "I treat this like my own money. I'm stingy."

Eschenberg also said Congress has allowed $5.781 billion for the project overall, and the current estimate remains under the allowance.

The House last week approved full funding for Hanford cleanup in 2005 as part of its massive spending bill, which still requires Senate approval. The bill does not include specific funding levels for Hanford, but it was in line with the Bush administration's request of $2.19 billion for cleanup at the 586-square-mile site.

In the bill, lawmakers said the corps review identified several problems that are likely "systemic with DOE's cost and schedule baselines: inadequate government estimating, inadequate government contract management, and inadequate contingency amounts."

The bill directs the Energy Department to notify, in writing, immediately when there is a projected increase of 10 percent or more in the total estimated cost for all construction projects in excess of $20 million.

Such notification will require the department to provide a detailed justification for the cost increase and identify how it will pay for the increased costs, the bill says.

The corps report found that overall, cost estimates for the Hanford project were good, but said not enough money had been set aside for construction contingencies or problems that might arise getting the plant up and running, said John Britton, spokesman for Bechtel National, the contractor building the plant.

"It all comes down to whose crystal ball is clearer. We've got our best estimate in there, and it'll come down to 2011 to see who's right," he said.

Other major DOE projects cited in the report for having uncontrolled cost growth are located at the Savannah River site in South Carolina, a plant in Paducah, Ky., and in Russia, where new power plants will be built to replace nuclear plants that generate weapons-grade plutonium.

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