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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 876-viii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE WELSH AFFAIRS COMMITTEE
Wednesday 17 May 2006 MR JOHN BURLEY MR RICHARD WAITE and DR BRIAN BURNETT Evidence heard in Public Questions 735 - 816
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Welsh Affairs Committee on Wednesday 17 May 2006 Members present Dr Hywel Francis, in the Chair Mr Stephen Crabb Nia Griffith Mr David Jones Albert Owen Mark Williams ________________ Memorandum submitted by Dragon LNG
Examination of Witness Witness: Mr John Burley, General Manager, Dragon LNG, gave evidence. Q735 Chairman: Good morning. Can I welcome you to the Welsh Affairs Committee. Mr Burley: Thank you. Q736 Chairman: For the record, could you introduce yourself, please? Mr Burley: I am John Burley, General Manager of Dragon LNG. Q737 Chairman: Could you begin by giving us some background about Dragon LNG and the plant at Milford Haven? Mr Burley: Yes, of course. Dragon LNG is a company that has been formed and has three shareholders: BG Group, Petronas and Petroplus. It has been formed in order to construct and operate the LNG import re-gasification terminal at Milford Haven. Its role is not to purchase and sell natural gas, it is there merely to construct, operate and own the import facility that is there. We are in the middle of construction of the terminal at the moment. We received planning consent in 2004. We are building two tanks for the storage of LNG - liquefied natural gas - and we are refurbishing a jetty that was there. You may be aware that it is a brownfield site that has been used in the past as a former refinery, but other parts of the site will also be used by another company as an oil storage yard. It is a brownfield site, we are refurbishing the existing jetty that is there and constructing two tanks for the storage of LNG and the facilities for exporting that into the National Grid, the National Gas Transmission Pipeline System. Q738 Mr Jones: Good morning, Mr Burley. Could you tell the Committee how much of the gas presently consumed in the UK comes from indigenous suppliers? Mr Burley: At present the vast majority of gas comes from indigenous suppliers. That is changing over time but only a very small percentage is currently imported. I could not give you the specific percentage but I imagine it will be less than 5%. That position is likely to change in the future. We have all read in the press as the North Sea production starts to decline there is a need to then replace that natural gas from other sources, and one of those alternative sources is to be able to import natural gas as liquefied natural gas. Q739 Mr Jones: In broad percentage terms, what sort of contribution do you think the Dragon facility will make to the UK's gas supplies? Mr Burley: The Dragon facility will provide about 5% or 6% of the national supplies. It is capable of importing that volume of natural gas through Dragon LNG. Q740 Mr Jones: Presumably that gas will go into the network. Is it possible to say how much of that will be consumed in Wales and how much in the rest of the UK? Mr Burley: It is not directly possible to give exact figures. The way that the infrastructure works in the UK is that natural gas is put into the pipeline network and that is used throughout the UK, but that includes Wales. In the past Wales has been on the extremity, particularly South Wales, of the gas pipeline network. That has constrained some developments that would otherwise have gone ahead because of the need for natural gas. Now that there is an import terminal in Wales that will relieve that bottleneck, if you like, in the system. Some of the natural gas that we import will be consumed in Wales. I am aware simply from reading press coverage and industry knowledge that there are a number of companies looking at potential power projects in the area and I do believe that is a direct consequence of the ability now to import natural gas through Dragon. Q741 Mr Jones: What other LNG facilities exist in the UK at the moment? Mr Burley: Actually, liquefied natural gas has been in the UK for over 30 years. It has been in five locations throughout the UK, including one in that area of Wales. Liquefied natural gas is not a new product in the UK. Q742 Mr Jones: Where are these other facilities? Mr Burley: One is in Bristol, Avonmouth, and as you go over the Severn Bridge you can see the tanks. Elsewhere they are in Scotland and northern England. They are spread across the country. A more recent development has been the refurbishment of one of those at the Isle of Grain to import natural gas by ship and two projects in Milford Haven, one of which is Dragon LNG and another project going ahead, South Hook LNG. Liquefied natural gas is not a new phenomenon to the UK. Q743 Mr Jones: What sort of a lifespan would these facilities be expected to have? Mr Burley: The lifespan is in excess of 30 years. It is designed to operate for 30 years with current equipment but the expectation is it will probably last longer than that and all of our facilities will last longer than that. Certainly if you look back over the current history of the industry, which in its modern state stretches over 60 years, a number of the facilities that started out at that early stage are still operating today. To give you a sense as to that, over that 60 years it has built up and now operates in about 20 different countries around the world and many countries throughout Europe, France, Italy, Spain, Portugal, all have LNG import facilities. Q744 Mr Jones: Do Dragon have proposals for any other sites in the UK or Wales specifically at the moment? Mr Burley: No, Dragon LNG does not. We have been set up purposefully to construct and operate this particular facility. Q745 Nia Griffith: Perhaps if I could just follow on the geography for the moment. North Sea gas, as we understand it, is in the north and the east and presumably all of the infrastructure is there to bring things in from that side, so what is the advantage in having this one sited in Wales, apart from the benefit to South Wales itself? It seems that there is a huge pipeline going across at immense expense, why is that necessary? Why was there not infrastructure on the other side that could have coped? Mr Burley: The pipeline that is being built is to provide for the import of the LNG that is coming from natural gas. As I mentioned earlier, South Wales has been on the extremity of the system and, therefore, to help relieve that extremity it is necessary to provide additional pipelines. In terms of why LNG in Milford Haven, partly it is related to the port which has got a long history of working with the energy industry and it is a deepwater port ideally suited for the sort of shipping the LNG industry needs. It is partly related to physical geographical location and the benefits of the port there but also in order to help relieve the natural gas infrastructure in the UK and provide natural gas to South Wales as well and provide that extra benefit. Q746 Nia Griffith: Can you explain exactly what liquefied natural gas is? Is it the same sort of gas as we have had from the North Sea? Mr Burley: Yes, I am happy to do that. I think there is a lot of confusion. People see the letters "LNG" and do not really understand what it is. It is simply natural gas, the same product that you get from the North Sea, the same as consumers use in their homes, 80 million homes throughout the UK, and it is transported across the country. The difference is it is cooled down to transform back into a liquid and that takes place at source locations around the world and then transported as a liquid. The reason for cooling it is simply to be able to transport more of it to make it more economic and to be able to transport more. It is then stored as a liquid at minus 160 degrees and when we want to put it into the Grid it is literally just warmed up. There is no real process that takes place, simply we pass water around the outside of the pipe work and that warms up the liquid, turns it back into natural gas and then it is pumped out into the pipeline network. It is the same as the natural gas that we are used to today. Q747 Nia Griffith: If you could explain to the Committee where it comes from and how you store it. Could you also say a bit about the energy consumption that you are using in this cooling process because it must be quite energy intensive. Mr Burley: The sources of liquefied natural gas are many and varied throughout the world. One of the benefits is that it helps to enhance the security of supply for the energy infrastructure into the UK. Currently some of the major exporting countries of LNG are Trinidad, Malaysia, Egypt, Nigeria, to name but a few, Australia, Indonesia, Qatar. There is a wide variety of sources. Yes, it is a relatively energy intensive process at that point to liquefy it. In terms of the re-gasification process, while it is transported it is stable at cool temperatures so there is no additional energy used to keep it cool; once it is cool it stays cool until you want to warm it up again. Normally, what we would use to warm up the LNG is sea water. In the case of Milford Haven, because the Haven is a Site of Special Scientific Interest, we decided not to use water to avoid having to warm up the water and affect the Haven, so we are burning gas in order to heat up the water to put that warm water around the pipes in order to export and warm up the LNG. There is an amount of energy used now to avoid having to use the water in the Haven. There are other projects proposed to use that as combined heat and power to maximise the environmental efficiencies associated with that. Q748 Nia Griffith: Apart from what you have already mentioned, are there any specific advantages and disadvantages of LNG? Mr Burley: There are several advantages, one of which is you diversify the sources of supply available for importing natural gas. It also allows us to bring natural gas from a wider variety of locations. Traditionally we bring it by pipeline from Norway and other parts of Europe but where the distances are just too great for that to take place we liquefy it and import it as LNG. That is the big benefit. One of the other benefits it provides to the UK is it provides a reliable source of energy to replace the declining production in the North Sea. It would be worth mentioning, because I know it is a concern, that the safety of the industry is paramount and over 60 years it has had an exemplary safety record throughout the world, certainly in re-gasification, so it has an added benefit in that respect, it is a safe product to import. Q749 Nia Griffith: I think you have explained that re-gasification process very well. Could you enlighten us about the concerns in Cilfrew where there is some sort of valve proposed and there are concerns about the safety? Mr Burley: Sorry? Q750 Nia Griffith: There are some concerns in a small village called Cilfrew, near Aberdulais, near Neath. You say you have got a very good safety record but could you explain what are the issues there. Mr Burley: I think that is a matter that is being addressed by National Grid. That is part of the pipeline infrastructure. That pipeline is not transporting liquefied natural gas, it is just transporting natural gas as an enhancement to the existing UK gas pipeline infrastructure. I am not aware that people have concerns. I am not aware of the specific concerns because it is a matter that is being addressed by National Grid. Q751 Mark Williams: You have touched on the safety issue there and I think in your submission you mentioned the contribution that liquefied natural gas would make to security of supply. Mr Burley: Yes. Q752 Mark Williams: Could you outline more immediately security plans and existing security issues relating to the plant and pipelines? Mr Burley: The terminal has been designated by the Home Office as an economic key point and that, therefore, has a number of security implications. That means that the security arrangements for the site are determined by the Home Office. In fact, all gas facilities in the UK, port facilities and onshore terminals, are designated economic key points, it is not unusual that that is the case. What it means is that the Home Office determines what security arrangements are at the site and those are then applied on the site. It really relates to the type of fencing and the security arrangements at that site. Q753 Mark Williams: The pipeline itself? Mr Burley: The pipeline has no specific security arrangements that are necessary; it is simply an enhancement to the existing pipeline infrastructure throughout the UK, of which there are many thousands of kilometres. Once the pipeline is buried the risk to the pipeline is very limited. Q754 Mark Williams: In your submission in paragraph 24 you mentioned that there has never been an incident at LNG that has affected members of the public or the environment. Have there been other incidents you may wish to relate to us that have not involved members of the public directly? Mr Burley: You are absolutely right, we are not aware of any incidents over the last 60 years that have affected members of the public. Inevitably, as in all operating plants, there are situations where a valve may leak but that is managed and constrained on site. It is simply dealt with as part of the normal operating arrangements. Q755 Mark Williams: What is the sort of response time to an issue like that? Mr Burley: Immediate. There is a 24 hour control room on the site. It is manned by the operators. Whilst the system is inherently safe in the sense that it does not need manual intervention to deal with any problems, there are trained and skilled operators on the site as well. Q756 Mr Crabb: As a consortium did you look at any alternative locations, either in Wales or the UK, for this project? Mr Burley: A number of locations were given some consideration but Milford Haven was ideally suited for the reasons I have mentioned: port facilities, access for the shipping, the fact it was a brownfield site and there is an opportunity to regenerate that site and refurbish the facilities there. For us it was an obvious choice. Q757 Mr Crabb: What kind of assistance or inducements were provided either by central Government or any other tier of government to enhance the attractiveness of Milford Haven? Mr Burley: There were no additional enhancements or inducements offered by local, central or regional government to Dragon LNG. We are not being provided with a grant of any sort for the construction of the LNG terminal. We went through the normal planning process that any industrial or home development would undertake, no specific support. Q758 Mr Crabb: Given your experiences with the project, how effective and efficient do you think the institutional arrangements are that we have in this country for granting planning consents and hazardous substance consents to LNG products? Could you comment on the interface you had with the DTI, the Welsh Assembly, local government and any other statutory consultees? Mr Burley: When we went through the planning consents there were over 38 statutory consultees who were included as part of the planning process. It was an extremely wide consultation that took place over a number of years. In our case the process started in 2002 and we received our planning consents at the end of 2004. It was over an extended period of time with a wide variety of consultees as part of that. It is the normal planning process we have gone through and that has worked successfully. You will be aware that there has been a subsequent request for a judicial review and, of course, that is taking rather an extended period of time to come to fruition. Other than that, the process was very extensive in terms of the number of consultees and parties involved. Q759 Mr Crabb: Given the extraordinary letter from the Treasury Solicitors to the Court of Appeal three weeks ago which made it clear that contrary to information contained in the court's written judgment HSE had not, in fact, carried out a risk assessment of a major release of LNG from a ship tied up at the jetty, are you able to tell this Committee whether any such assessment has been made and, if so, by whom? Mr Burley: We certainly undertake risk assessments. I am conscious that there is an oral hearing at the Court of Appeal as part of the request for judicial review. With that pending it is difficult for me to give as full an answer as I would like today but I am happy to do so as a follow-up once that process has been completed. Yes, risk assessments were undertaken. Q760 Mr Crabb: For the record, you are satisfied that adequate risk assessment comparable to the rigour and quality of risk assessments for the landside risks have been undertaken for the marine risks and that work has been done? Mr Burley: Marine risk assessments have been carried out. Q761 Mr Crabb: Would that be work that you could make available to this Committee as part of the inquiry? Mr Burley: It is not normal for risk assessments which are carried out as part of COMA submissions to be made publicly available, that is not the norm in the UK. It is not particularly an LNG or energy industry question, it is just a wider issue. Q762 Mr Crabb: One final question on this. What potential is there for the court hearing to delay the scheduling of the project? Mr Burley: We hope it will not delay the scheduling of the project. As I say, we are in the middle of construction at the moment. We are confident nothing untoward did take place and we went through the correct processes for receiving planning consent, so we do not envisage any difficulties arising. Q763 Mr Crabb: You do not see a risk that those planning consents and hazardous substance consents could be overturned? Mr Burley: As I say, we are comfortable that we went through all the right planning process. Whilst, inevitably, clearly it is a frustration and a diversion we are confident that everything was done correctly. Q764 Albert Owen: Apologies for being late. Going back to the safety and planning issues, how volatile a cargo is LNG compared to aviation fuel because one of the big issues with aviation fuel is obviously combustion and fire and the berthing of vessels whereas with crude oil it is the impact it has on the marine environment, particularly you can set it alight easily? Where does LNG come in the volatility of cargoes? Mr Burley: It is a very different type of cargo. It is much safer than other petroleum products. To give you an example: if you had a glass of LNG as a liquid you could stub out a cigarette in that. That gives you an idea that it is a stable product. Once it vaporises and warms up and transforms into vapour it is the same natural gas as is used in homes throughout the UK. It is a product that members of the public in terms of natural gas are used to and familiar with. Q765 Albert Owen: If there was an incident in the port and there was an accident at a berth it would be likely to damage the marine environment rather than to be an explosion? Mr Burley: No, it would not damage the marine environment in the same way as if you had oil pollution. What would happen is literally it would pool and over a period of time it would vaporise off. As it warms up it vaporises. Natural gas is lighter than air and, therefore, it would not leave any lasting impact on the water or the immediate habitation around that area. Q766 Mr Jones: There are risks of pool fires and flash fires as far as an LNG spillage, is that correct? Mr Burley: There is a risk, as with all LNG, and that is why we undertake risk analysis to make sure that is managed out of the process and risks are contained and managed properly. Q767 Nia Griffith: Can you tell us a little bit about how many jobs will be created both in the construction process but also in the longer term? Mr Burley: Yes. During the construction process, in terms of the team on site during construction of our site, we will have at the peak in excess of 400 people. We have made it a real focus to try and attract as may of those from the local area and at times up to 70% have come from the travel-to-work area. We cannot always get the skills that we require and there will be specific circumstances when we have to bring skills in from outside the area during the construction period. We are endeavouring to work with a number of different organisations to help skill up in the area, working with the Prince's Trust and talking to a number of other organisations to help enhance skills and training in the area. That is the order of magnitude in terms of the current construction. There are knock-on effects during that period. We have got a significant number of subcontractors working on the site from local companies. At the last count there were in excess of 20. Particularly in two cases we are spending in excess of £30 million with two local subcontractors. That in itself generates significant work and employment opportunities elsewhere in the local economy. During the operations phase, which is clearly different, the manpower levels are lower and on our site we would anticipate 35-40 people. We are still reviewing that at the moment and as part of the process we will go out to recruit operators and train those up during the course of this year. In addition to that, we are aware, as I mentioned earlier on, there are other economic development knock-on effects as a consequence of having the terminals built at Milford Haven and we talked about some of the power station proposals that are around, so I hope it will have some long-term economic development benefits for the area. Q768 Nia Griffith: Are you suggesting that those 35-40 jobs are likely to be local jobs? Mr Burley: That would be our ambition and certainly over the long-term I think that is right. Perhaps in the first phase we will have a variety of experienced people on site and we will build up to that. That is certainly our aspiration, to make those local jobs. Q769 Nia Griffith: If I could turn to the contractors who have been working for you. Could you put that in context for us in terms of what percentage they represent of the money you have spent? You have given us the number of contractors but how does that look in that context? Mr Burley: The actual terminal itself will cost us about £200 million to construct but the vast proportion of that is in materials, specialist steel that has been imported that is simply not possible to get in the local area or to get much of it in the UK. Some of it does come from the UK but not all of it. A large proportion of the spend is on equipment and steel that in some cases has to be imported. In terms of the manpower levels and that expenditure, as I say up to 70% has been from the local travel-to-work area and a lot of fabrication is taking place within the local vicinity. Of that which is non-equipment, if you like, it is an extremely high percentage. Q770 Mr Crabb: There has been quite a dramatic fall in unemployment in Pembrokeshire in the last year, particularly male unemployment. Are you aware of any studies which have tried to assess what proportion of this fall in unemployment is the direct responsibility of LNG? Is there an LNG effect? Mr Burley: Certainly we would like to think there is. I am not aware of any specific studies that have investigated that. As you say, the trend in the UK has been in the opposite direction. I think there is a clear expectation and a linkage between the work on the LNG site and by the very nature of being able to employ as many people from the travel-to-work area as we can we have had a direct impact on those figures. Q771 Mark Williams: More generally, what has been public reaction to the construction of the site? I suspect we touched on some of that just now but what are some of the concerns that members of the public in the area have raised with you? As a company, how have you gone about responding to those concerns? Mr Burley: They probably separate out into two areas. One is the LNG safety questions that have been raised and a number of people have had concerns about that. The way we are addressing that is by getting out into the community and taking opportunities to help explain what LNG is and what is going on at the Waterston site. We take as many opportunities as we can, one of which is today, to help inform on the project. We also go out to speak to a variety of Milford Haven users, the Rotary Club and a number of other different groups, to help improve knowledge and understanding over a period of time. The other area is probably more of a construction impact to do with the construction period that particularly affects the village of Waterston. We have regular meetings with the village through the liaison committee that has been established there over many years now. In fact, we did make some significant changes to the plans for construction. We reopened the railroad that had been disused in order to bring aggregate in for the construction process and that has taken over 4,000 heavy goods vehicle journeys off the road which would have had a very significant impact on the village. We have also tried to amend the entrances to the site so that limits the impact on the village. Vehicle movement is probably the main impact and we have tried to address that through the opening of the railroad. We have introduced rules where we use heavy goods vehicles only between the hours of eight and four thirty during the day and only Monday to Friday. That is what we aim to achieve but that is not always possible, inevitably there are instances when we have to bring in vehicles outside of those times and in those situations we endeavour to provide information to residents who will be affected by that by fliers through their doors to help advise them of any specific situations. As always, there will be instances when someone arrives 15 or 20 minutes earlier than we wanted them to and they are talked to and we try as actively as possible to limit the amount of movement. We target to have only 20-25 heavy goods vehicles arrive at the site a day but recently that has been down to about 12. As you can see, we are making a lot of efforts to try to limit the impact on Waterston village. Q772 Chairman: If I could end by asking a final question. You may have answered this already in your earlier response to Mr Mark Williams. How would you characterise your relationship with the local community? What precise processes of consultation have you had and what are the outcomes of those consultations? Mr Burley: The principal consultation at the outset was that which took place as part of the planning consent. To bring it up to date, we do work with the liaison committee of the village. We are a new company which has been formed so it is a slow process to get out there to improve people's understanding of what is happen at Waterston for Dragon LNG. It is a programme that we are undertaking and community affairs is a key focus for us to get out there and explain to people what liquefied natural gas is. It is a focus of our business to try to help improve understanding. Q773 Albert Owen: Just on the link between employment and community issues, you mentioned a number of august bodies, including the Rotary Club, and I am sure there are big interests there, but what about the future? Do you have any links with the schools? Do you plan on any links for career paths with colleges and schools because I think looking to the future is important, particularly if you want to maintain a skill base locally? Mr Burley: We are working through the Darwin scheme which was set up in Pembrokeshire to help improve science education in schools. Last year we helped to refurbish a mobile science unit that they use to go out to the schools. In fact, since October last year when we triggered that over 80% of all ten year-olds have benefited from access to that facility and the broadband access that is on that bus. Most schools do not have access to broadband. This unit was able to take science education to those schools and help them to understand. That is an example where we try to help improve understanding. We are working with the Prince's Trust to help set up a Get into Construction scheme. We are conscious that we can help in some way to improve skills levels and people's prospects. We are working with the Prince's Trust which specifically set up a Get into Construction Scheme which started this year and they have started rolling that out for people generally between 16-24, that sort of age group, where we are focusing skills training. Certainly as we go out this year and start recruitment of operators and staff we will recruit those and they will be sent away to receive training on other LNG facilities around the world and will be incorporated into the operations teams of those facilities so they will get real life experience of working in those facilities. Over a period of time we hope to build up a strong skills base to help enhance the employment prospects for people. We are very conscious during construction of construction safety. Everybody who comes on to our site undertakes a two hour safety induction for the site. It is important that we raise people's expectations when they arrive at the site to the standard that we expect from everybody working on that site in terms of construction safety. Hopefully when people move on from our site they will take those higher standards and expectations with them to other sites. We can only hope that will provide benefits elsewhere. Q774 Chairman: Do you have a good relationship with your local Members of Parliament, Assembly Members, councillors, the Welsh Assembly Government? Mr Burley: We certainly have a relationship with them and people have been very supportive in terms of being open and communicative. Clearly they express the concerns of members of the public. We work with Assembly Members, local councillors, MPs and other elected representatives to help improve understanding. There is an open invitation to any Members, and I extend that to the group here today, to come and visit the site, to see what we are doing and get a feel for what is taking place on the site. Yes, we try hard to build that relationship to help improve understanding. Q775 Chairman: Given what you have described in terms of your concerns about safety and the environment and so on, would you that you have a relationship that could be described as a partnership with the local community? Would you say that the locally elected representatives champion LNG? Mr Burley: Where we have had the opportunity to sit down and talk to people and explain what liquefied natural gas is, people walk away with a lot more understanding and confidence about what is taking place and at that point they have the opportunity to speak to their friends and colleagues in the community and build the confidence. We are a newcomer to the community, both as an industry and as an organisation, so it is taking time to build those relationships but they are incredibly important to us because we are going to be there for a very long time. We try to do that through a range of open communications with people and small sponsorship of groups within the village. It is important to us that we help to build that partnership over a period of time. Chairman: Thank you very much for your evidence today and for the written evidence that you have sent us. If you feel that in light of the questions today you would like to add something further in a memorandum we would be very pleased to receive it. Thank you very much. Witnesses: Mr Richard Waite, Engineering Director, and Dr Brian Burnett, NDA Regional Director, Nuclear Decommissioning Authority, gave evidence. Q776 Chairman: Good morning, bore da. Welcome to the Welsh Affairs Committee. For the record, could you introduce yourselves, please? Mr Waite: I am Richard Waite, the Engineering Director of the Nuclear Decommissioning Authority. Dr Burnett: Brian Burnett. I am the Regional Director of the Nuclear Decommissioning Authority for region two which includes Wylfa Power Station. Q777 Chairman: Can you begin by giving some detail of the work of the National Decommissioning Authority and its role in the nuclear power sector? Mr Waite: Certainly. The NDA was formed on 1 April 2005 under the Energy Act 2004 as an NDPB - a non-departmental public body - with its main and primary purpose to deal with the civil nuclear legacy, and I will go on to explain a bit more about that in a second. Our headquarters is in Cumbria with four regional offices spread around the UK, one of which Brian looks after, as he has just said. Our key driver is safety, environmental protection and security that sits behind everything we do in our mission. We have something like 230 staff at peak split 50/50 between the headquarters in Cumbria and around our regions, and we are moving towards that peak hopefully over the next few weeks. We have an annual budget of around £2 billion which covers decommissioning and clean-up and the costs of our continuing commercial operations. We own the assets and liabilities of 20 sites which were previously in the ownership of BNFL and UKAEA and so on. That includes Sellafield, Dounreay and all of the Magnox stations and, indeed, the research facilities, Harwell, Winfrith and so on. We have 20 sites in total. As I said, our primary role is the safe and efficient clean-up of those sites to programme and cost targets bearing in mind that safety and environmental performance is crucial to all that we do. Those sites are operated under contract from the NDA by operating companies called site licence companies. Those site licence companies are directly contracted to the NDA but they are independently regulated by the various regulatory authorities, so the NII, for example, the Environment Agency and OCNS regulate those site licence companies directly, not through the NDA as such. That is a brief outline of what we do. Q778 Chairman: Can you describe your relationship to the British Nuclear Group? Mr Waite: British Nuclear Group are what one would recognise as a parent company for our site licence companies. So the site licence company, for example, that runs the Magnox stations, which is Magnox Electric Limited, is effectively owned by BNG which in itself, as I am sure you aware, is owned by BNFL. Our relationship with BNG is one of we are the owner of the sites, BNG is the owner of the site licence company and we have a parent company arrangement between ourselves and BNG whereas our primary contract is with the Magnox Electric outfit that runs the sites themselves. That is where our primary contract lies. Q779 Albert Owen: One of the 20 sites is Wylfa which is operated by BNG, and you have just explained the relationship, but what has been your specific role since April with regards to the decommissioning of Wylfa? Dr Burnett: For each site we have a small site team of experienced people and their role is to provide contract governance, that is managing the contract between us, and they have an assurance role to make sure that the contractor complies with the contract and the other policy requirements that the NDA have, and as the line of reporting they are the point of contact with the site. It is important to recognise that what we do not do is direct operations on the site and it is very important that we do not get involved in any decision-making processes that might in any way affect safety because that is a matter for the regulators. It is a role of managing the contract, providing assurance and making sure that the contractor meets his contract, so that would be our role. Q780 Albert Owen: Do you see any potential conflict between the owners of the site and them not getting involved in certain aspects of it? Dr Burnett: There is a potential for conflict but the contract is set in such a way and the protocols are agreed with the regulators in such a way to ensure that does not happen. It is something that we constantly remind ourselves of because we are not the licence holder. They are a full scope contractor which means that they provide the programme of works, we provide the money and there is an incentive arrangement in the contract whereby they earn a fee against performance against a contract of work that they have put forward and we co-ordinate in a national sense. It is a very important area that we do not direct work that we are not licensed for. Q781 Albert Owen: At present, what is the timetable for decommissioning Wylfa? You have just brought out this strategic plan, of which we have had the draft and the final. What is the timetable if it can be broken down into layperson's terms? Dr Burnett: We will generate until 2010 and there then follows a period whereby we remove the fuel which takes between 18 months and two years, so that takes us to about 2012. Then there is a period of preparation for care and maintenance where all of the facilities outside of the actual reactor core itself are stripped away and that takes us until 2025. The care and maintenance then continues from that date until final site clearance in about 2116. In that period you then come back and remove the core and its contents. That is the established plan reflected in our strategy. Q782 Albert Owen: There has been some movement since your draft. You are a new body but you did say this would be some 250 years in total. Is 2116 still the end date or can that be brought forward? Mr Waite: Shall I comment on that? One of the issues that we identified in our strategy was that we wanted to examine the acceleration of final site clearance and, indeed, we do have the commitment in our strategy now to create a business case by the end of this financial year site by site to see whether we can bring forward those end dates. We believe that final site-by- site clearance of that and all areas in the future gives us a number of difficulties in terms of maintenance of skills, socio-economic issues and intergenerational equity issues, and it would be far better if we could see a way clear of them earlier. We have talked about a so-called 25 year site clearance plan but that is a nominal figure. We are investigating during the course of this year what we can do on a station-by-station basis and we will create a business case to present to the DTI if we believe we can do it earlier. Q783 Albert Owen: I presume you have been learning from sites such as Trawsfynydd? Mr Waite: We are. We are learning not only from our UK experience but we have recently agreed some collaboration arrangements with EDF who have got some gas operating stations that they have got advanced plans for as well and they are looking to clear their sites within circa 25 years. We are learning internationally as well as from the UK environment. Q784 Albert Owen: Just one final question on this. During that timetable, and I know you have already engaged with the local community, what further issues do you need to discuss with them? For instance, the socio-economy issues are important and you were talking about retraining programmes already engaged on site but I am interested in outside, so what is your relationship with the local community? Dr Burnett: We picked up the brief in April of this year. One of the first things we sought to do was to find a socio-economic baseline so we joined together with Anglesey County Council, the Welsh Development Agency and Anglesey Aluminium to do a baseline study for the island. We have done that. We did a public presentation of that. The results of that report will be publicly available. We regard that as a baseline for all of those bodies and any other bodies that are interested for the way forward. We now seek to work with the relevant bodies to look for opportunities to deal with the socio-economic issues from running down station staff. We still have some time to do that and a window of opportunity. We look for capital investment; we look for sustainable things to contribute towards. Over the next two years, I guess things will come forward and we will continue to develop that. The site contractor is a full scope contractor. Part of their contract is to develop these links and to look for opportunities for socio-economic investment. Q785 Mark Williams: Have you any clear estimation for the costs of decommissioning, particularly in the Welsh context, Trawsfynydd and Wylfa? The latest figure UK-wide this year was 62.7 billion. In a Welsh context, where are we in your estimates? Dr Burnett: The Wylfa whole lifetime costs are 1.7 billion. I am not sure of the Trawsfynydd figure but I would have thought it was of the order of three-quarters of a billion. Q786 Nia Griffith: Turning to Sellafield, perhaps you can explain what sort of waste Sellafield receives? Mr Waite: If I can explain the process in broader terms, the fuel that the Magnox stations use gets manufactured in Springfields at a Magnox fuel manufacturing facility there. We might go on to say a little more about the implications of that in a minute or two. That fuel then gets transported to the Magnox stations, Wylfa included, where it is loaded and the Magnox station at Wylfa has something like 600 tonnes of fuel per core. Progressively, as that fuel gets burned up, it gets taken out and sent by rail transport in very heavily protected flasks up to Sellafield at about a rate of 140 tonnes a year on a replenishment basis. The fuel goes in; the fuel goes out, so it is not waste at that point. It is spent nuclear fuel. When it arrives into Sellafield it goes into a series of facilities, the first of which is cooling bowls where it sits for a number of months to cool off, before it is then decanned. The fuel is decanned of its magnesium alloy coating, just revealing the uranium metal fuel, which is ultimately put into a magazine and transferred into a nitric acid dissolution process inside the Sellafield complex, inside a building called B205. This particular building is the Magnox reprocessing facility in Sellafield. It is more than 40 years old. It was commissioned and up and running in 1964. It has been dealing with all of the Magnox fuel from all of the Magnox stations and indeed has dealt with it very well up until this point. What happens in that particular building is the fuel is dissolved. Plutonium and uranium are extracted off and turned into oxide powders for safe storage in Sellafield. The remaining fission products are then concentrated down during a series of evaporation processes and ultimately stored as heat generating high level waste inside the Sellafield complex prior to being taken into a vitrified cask, which is the long term storage and disposal concept that has been in place for some time now for dealing with high level waste. The whole cycle takes the fuel through from being fuel to dissociated plutonium, uranium and high level waste in that sense. That then gets turned into the glass box which ultimately will get disposed of or stored, depending on the government's agreement with the CoWRM recommendations which are coming along in the summer, as we know. Q787 Nia Griffith: What happens currently with it once you have it in vitrified form? Mr Waite: It is stored. There is a vitrified product store in Sellafield where the glass blocks are effectively encased in stainless steel and the stainless steel canisters are stacked up on top of each other in a series of cells and stored there until such time as we decide collectively in the UK what we are going to do with them, which could be longer term storage still or ultimate disposal in some kind of repository. Obviously, that is where CoWRM are potentially heading. Q788 Nia Griffith: What sort of timescale do they need to be stored for? Mr Waite: There is a cooling period in Sellafield. I cannot remember the exact numbers but it is of the order of a small number of years, from memory, before you can start shipping it out. It is effectively cooled to be able to be handled and put into a repository. I cannot remember the exact number but it is not weeks or days. It is certainly more than that. Q789 Nia Griffith: There have been some leaks of the CoWRM report which was supposed to be coming out in July. What would you see as potentially the most logical way to store things in the long term? Mr Waite: During the CoWRM public consultation period last year we offered our views in that we would like to see some form of deep geological repository as a final resting place for this high level waste, primarily because that is where all the best practice seems to be heading. The Fins and so on are heading in that direction. Also, it gives a geological barrier to the fission product release and so on and we believe a safety case can be created to protect the environment for the time required. We made those recommendations to CoWRM. CoWRM, as you probably already know, have released their draft report. It came out a week or so back. It suggested that that is what they are going to recommend but their formal recommendations will not come out until the summer. If they do recommend deep geological disposal, we would welcome that. The key issue for us thereafter is the timing and availability of that repository because clearly the storage regime we have in place at the moment is linked to how long the material has to be stored vis a vis the availability of the repository. Q790 Nia Griffith: Are there any suggestions as to where that might be? Mr Waite: It is far too early. It would be premature to speculate. We do not even know what the process will be for site selection because I do not think anybody has designed it yet. I believe the government has to decide upon the CoWRM recommendations in the summer before any of that is considered so I see it as very premature to be even thinking about sites. Q791 Nia Griffith: You mentioned about 140 tonnes per year coming to you from Wylfa. Is that a correct figure? Mr Waite: It is the average number. The fuel that has been sent to Sellafield since 1971 from Wylfa is around 5,000 tonnes. If you divide the time between 1971 and now, it comes out at about 140 tonnes a year on average. Q792 Nia Griffith: That is currently all still stored at Sellafield? Mr Waite: No. The vast majority of that has been reprocessed, the plutonium separated, the uranium separated and the high level waste vitrified as a result. That is an ongoing process. The vitrification process does not finish in Sellafield until 2015. That is the current target and we will stop vitrification at that time. Q793 Nia Griffith: Of the 140 tonnes that you get, you say you vitrify some parts of it. What percentage of the volume is that and what happens to the rest? Mr Waite: It is a very small percentage of high level waste. It is of the order of less than 2% from memory. The vast majority is recovered uranium because this is uranium metal fuel. The main construct of that is uranium 238 and that 238 is recovered during the dissolution process. It is separated out from the dissolved liquor and it is transformed into powder form for storage in drums for potential disposal or potential reuse. That is another strategic issue that we have identified in our strategy document that we are currently working on, the issue of whether separated, recovered uranium is for reuse or for disposal. Q794 Nia Griffith: What volume do you receive from all of the nuclear power stations? Mr Waite: I do not have that at my fingertips. Dr Burnett: The plant at Sellafield reprocesses around 800 to 1,000 tonnes a year, if that is helpful. Q795 Nia Griffith: Can you tell us a little bit about the life span of Sellafield? Is it going to go on for ever? Does it have a life span and is there a proposed last date for receiving waste? Mr Waite: Yes, there is. The current plan for closure of the Magnox reprocessing facility is linked to the time it will take after closure to decommission that plant, clean it up to meet the overall commitments that have been entered into by the UK, to meet the OSPA Convention requirements for near to zero radioactive discharges into the north east Atlantic by 2020. When you work back from 2020, you come up with a date whereby you have to effectively stop operations. Otherwise, you do not have enough time to diminish the discharges. That current date for B205, the Magnox reprocessing facility, is around 2012/2013, which then drives back into the two years that Brian mentioned in terms of the flow of fuel from Wylfa needing to come at around 2010. You can see from 2010 to 2012 and through to 2020 there is a programme of activities all linked together to ensure that those discharge requirements are met. As I said earlier, the plant is an ageing plant. There are increasing burdens on asset care and maintenance that are quite significant. Any potential extension of that plant, setting aside the regulatory commitments and so on and the international commitments to reduce discharges, would be quite expensive and also burdened with some risk. Q796 Nia Griffith: You say it would be very problematic to extend the timetable if Wylfa was given an extension. Are you saying it would be problematic to be continuing to receive waste from them after 2010? Mr Waite: Yes, very. Q797 Nia Griffith: You cannot see an easy way of extending it? Mr Waite: There is no easy way. It is not just Sellafield. Sellafield is the primary problem but there are other problems with extensions which we can discuss if you wish but Sellafield's problem is those facilities which are ageing, our need to decommission them and clean them up to meet the various international commitments that we have. That drives our current timescale, coupled with the fact that they are ageing and taking some looking after in terms of the costs and associated activity of keeping them maintained. Q798 Nia Griffith: Looking to the future, if there were a new generation of nuclear power stations, would you say there would also have to be a completely new generation of dealing with the waste? In other words, new facilities completely? Mr Waite: New build, as I am sure you are aware, is not our domain. In terms of the decommissioning or waste side of it, it is not necessarily the case that you have to reprocess fuel. Other countries and we have a concept where you can store the fuel until you have decay and heat drop-off to the point where you can consider direct disposal in a repository. That is the assumption, for example, for some of the plants in the UK, the more modern plants, that the fuel will not be reprocessed so you do not need a Sellafield type facility in terms of reprocessing. What you will need is a store to store the fuel until such time as you decide that you are going to dispose of it. There are options around fuel disposal or fuel handling that do not necessarily mean reprocessing would have to be continued or replaced. Q799 Nia Griffith: If you do not reprocess, does that mean that you have to store for longer? Mr Waite: It depends on how long it takes to put the repository together so the repository availability timescale is crucial in that. Again, there is a timescale whereby the fuel has to be stored to allow it to decay and cool off. It is in the order of years to allow it to be handled or packaged. You would have to build a plant to condition it; you would have to have containers to put it in and so on. You would have to store those containers and then those would need to be disposed of in due course. That is indeed our plan for some of the later horizons for advanced cooled reactors. At the moment that fuel will be stored and directly disposed of in due course. Q800 Nia Griffith: Would you see it being stored at the sites where it has been used or would you see it being brought to somewhere like Sellafield? Mr Waite: The current arrangements for the advanced gas coal stations, if we move away from Magnox for a second, is that the fuel will be stored at Sellafield. It will be transported to Sellafield rather than at the site. It will be stored at Sellafield until such time as we decide whether it is going to be direct disposed or whether there is some other solution such as long term, dry cask storage. There are various solutions around. We have commissioned - again as part of our strategy which is on our website - a national spent fuel review this year. We are looking at all of the options over the course of the coming year with all the key stakeholders, regulators, NGOs, et cetera, to say, "Let us re-examine whether or not long term storage and disposal is the right thing to do or are there more beneficial options for the UK that we could consider?" That is again being done in the public domain. Q801 Albert Owen: Before going into some of the greater detail on the possible extension of Wylfa, can I go back to the response you gave to the lifetime cost of decommissioning to 2116, 1.7 billion? A lot of percentage of that will be for programmes to enhance the area socio-economically. Dr Burnett: It is 2125. We start the final clearance in 2116. Q802 Albert Owen: A lot of those programmes would be similar to some coalfield regeneration programmes? Dr Burnett: There is not a significant budget in there for socio-economic generation. Q803 Albert Owen: Where will that money come from? Dr Burnett: To fulfil our remit? We are still in the process of consultation and working out what our remit means in terms of how much we will spend. We certainly have no underpinned plans to spend so that number does not include any socio-economic expenditure. Q804 Albert Owen: BNG told us that the decision for an extension on Wylfa rests with yourselves. That is what they told us in their submitted evidence. I understand you have touched on some of the considerations and you call them problems. I call them challenges because we have a fixed timetable. In that fixed timetable, you say obviously we have the international obligations of 2020 but within that have you been flexible in the sense that, yes, you produce 140 tonnes? One of the reasons for a request for an extension is the unique situation of Anglesey Aluminium which takes most of the electricity produced at Wylfa. Have you looked at possibly running it down in a different manner - i.e., keeping one reactor going where half of that could be used at Anglesey Aluminium and the other half sold on the market, thereby producing less fuel, which could be handled under a different timetable to the one you envisage now? Dr Burnett: There are two issues there. It is currently UK policy to reprocess Magnox fuel. The type of fuel Richard was talking about for advanced gas reactors and pressurised water reactors is an oxide fuel so it is a different fuel type. The issue about closing down the plant at Sellafield is when you receive the last fuel element. If we were to extend Wylfa, we would have to extend the life of 205 and associated plants with all the costs, problems and challenges that that presents. Running it down more slowly does not help you. It is the despatch of the final amount of fuel and the defuelling cycle. We will clearly optimise the closure of the reactors within the safety envelope permitted by the NII, to achieve the maximum return on the asset which is an operating power station and thereby the socio-economic benefit. We will finesse it as best we can but the critical thing is the despatch of the last fuel element. Q805 Albert Owen: There is not such a big problem with Springfields in that, if a decision was made now, they could produce the amount of fuel? Dr Burnett: If we wish to turn to the supply of fuel, that is a slightly separate matter. The Magnox closure plan was in the year 2000. Therefore, all of the constituent parts of the industry and the fuel cycle have been planning for the orderly shutdown of all 11 stations over that period. The plan for Springfields was to progressively run down its sources of supply for its plant in order to meet the programme in the most economic way, as you might expect. Certain amounts of that plant have now been taken out of service. The supply routes for uranium material, for the magnesium alloy that you need, have all been run down. They would need to be re-established. Never say never. It could be done but it has never been done. There are no other sources of supply in the world for Magnox fuel now. It is a uniquely British operation so there are considerable challenges in doing that. It could be done at great expense but I must re-emphasise that it has been part of a long term plan that we would be reversing. It would be a question of time and expense. The magnesium alloy source of supply is no longer available to us. We have to find another one. The safety case for that fuel is then in question. You have to do work on that and so on so there are a number of challenges. Could it be done? Yes. Would it be very expensive? Yes, it would. Q806 Albert Owen: That is a fair analysis. A lot of what you are doing is for the first time as an organisation so you are in new territory in practically everything you do. There is not really a working model. I keep hearing the down side of the additional costs of reprocessing et cetera and the Sellafield knock-on, but also there is the extra electricity that you can generate. Has this been taken into the equation? On the NII licence, the reason the decision was made in 2000 was that they were undergoing an inspection which could have gone to 2014. The only reason they did not at that time was because of the mooted 2010 closure. What additional inspections have to be done? What are the costs of those and do you have the figures for what additional electricity could be generated to cover those costs? Dr Burnett: On the first point about Wylfa, you are absolutely correct. The periodic safety review extended to 2014. However, the inspectorate put a marker down, as you correctly said, for certain safety modifications to be required. The estimate of costs for those modifications is of the order of 70 to 100 million of capital investment. It is not a question of writing on paper; it is a question of doing physical modifications. That was the number for that element. Q807 Albert Owen: We have heard those figures before but what additional revenue in two years would be from Wylfa Power Station? You have a contract of a quarter of that going at a fixed price. Let us say that would have to be negotiated but to the grid at today's prices. I do not expect you to speculate on an exact price for the future. Mr Waite: We do have those figures. As Brian finds them, I would like to explain the NDA's approach to some of these issues and set it in context. One of our responsibilities under the Energy Act is to seek out net revenue beneficial opportunities from using our existing assets, wherever they may lie. Q808 Albert Owen: It benefits you if you generate more electricity? Mr Waite: Indeed, if it is a net benefit in terms of the overall life cycle costs of dealing with waste horizons and so on. We are required to identify such things and put them up to the DTI for endorsement. We are progressing one right now on Wylfa for potentially extending the current closure date from April 2010 to December. That is progressing through due process, looking at the electricity generation revenue versus the cost of extension, bearing in mind it does not bridge some of these boundaries that cause us the larger difficulties around OSPA and so on. There is an example, if you like, of us voluntarily seeking out an opportunity for making additional money out of this. In parallel with that, we are also being asked by the DTI to carry out a feasibility study on further extensions beyond 2010, where we do take account of the revenue that would be generated, the market price that you have to assume in terms of the different scenarios and so on; but also offset that against the various costs of starting to lose in Wylfa, Springfields and Sellafield. We are currently doing that study. We can talk to you about where we are on it today. Some of the information we are sharing with you today is from that study. We are going to make that publicly available in due course when we have finished that bit of work for the DTI. At the moment, it would be fair to say it is looking unlikely that an overall positive business case would be generated when you take account of the costs of Wylfa, Springfields and Sellafield operational extensions and all that they mean against even the optimistic views of electricity pricing. It is not looking positive. We have not finished the work but we can talk about some of the underlying figures. Q809 Albert Owen: I would like to get at what likely additional production there could be from that two year extension. Dr Burnett: There are two or three variables here. How much station output can one assume? We have sought advice from BNG about what they would estimate would be the output at that time. That figure is obviously subject to large variation. We have also sought advice from the DTI on what electricity price one should assume at that time. We are all aware they are very high at the moment. They are likely to come down. If you put those two things together, the two year income from Wylfa is around 380 million. If you were to continue with the Anglesey Aluminium contract which you alluded to, that would reduce to around 330 million but that is just the income. Q810 Albert Owen: You have the income aspects and those ongoing costs that you would have to bear in the business case. Additional to that for the wider local economy, there would be possible closures and job losses that could be added to that equation? I know it is not a matter for you. Dr Burnett: It is a matter for us in so far as we have to have proper regard for the community. The figures for the run-down are published in our lifetime plan. They are published in the trial report which you are familiar with. Yes, the impact of that is known and the impact on the economy can be calculated. Q811 Albert Owen: If there was closure, if you could not get an alternative source, there would be somewhere in the region of 20 million per annum of lost revenue. You would be starting the decommissioning process in 2010. If you were to extend that, there would be no job reductions at Wylfa for those years? Dr Burnett: That is a reasonable assumption, yes. Q812 Mr Crabb: There have been reports in the Welsh press recently about Wales being considered as a possible site for deep storage of nuclear waste. Is this something you have been involved in? Mr Waite: The CoWRM report thus far has only set draft findings. The government has to decide in the summer whether or not it is going to accept the formal recommendation of deep geological and our understanding is that only thereafter will a process begin, of which we have no visibility, with regard to some kind of site selection mechanism. It is too premature to talk about specific locations in my view at this point in time. Q813 Mr Crabb: As far as you understand, these are unsubstantiated rumours? Mr Waite: As far as we are aware, yes. We are not involved in that in any case. Q814 Mark Williams: This Committee, as part of its investigations, visited the Argonne Laboratory in America and we heard about pioneering work to reduce the life span of hazardous waste down to between 100 or 200 years. Is such research being undertaken here? If not, what are your links with America and can some of the technologies they are using be employed here? Mr Waite: One of our remits under the Act is to ensure that we commission sufficient research and development to support our overall mission. That is not only spending money ourselves; it is also looking to establish collaboration agreements with other organisations that may well be spending money on certain techniques such as the one you mention, whereby we can tap into that for the benefit of the UK taxpayer. We have recently signed up to an agreement, for example, with EDF in France, where we are going to share information about how to handle their gas reactor decommissioning. We might be able to benefit from that. We are close to signing one with the Department of the Environment in the US who clearly are the people involved in the Argonne work as well. With regard to that particular activity out there, we are familiar with it. We have arrangements through one of our organisations where we are keeping tabs on progress, as indeed we do on many R&D streams. It is fair to say that the technique that you are talking about, as far as we can see at the moment, is very much one at bench test level. It is pretty much experimental. It is the transmutation process that has been developed under the guise of the urex, uranium extraction, process, where they take uranium out but leave the plutonium and heavier isotopes in there. They simply bombard them with neutrons and transmute them into more stable elements, thereby reducing the overall hazard over time. It is a very interesting technology. We are keeping tabs on it. In terms of it becoming industrialised, with the timescale that we would require to make an impact on our programme, we think it is pretty unlikely that we will be able to treat any of our high level waste through that process. Our timescales are to finish reprocessing and vitrify our stocks by something like 2015. Having said that, if somebody does produce a pilot plant and we can tap into that, we would be more than interested. Q815 Mr Crabb: What sort of budget are you talking about on research and development? Mr Waite: We fund a direct portfolio with an organisation called Nexia, which is our only direct spend on R&D. That is circa nine to ten million a year. The larger spend is for our site licence companies. Our site licence companies commission work as well and that is running at around 70 to 80 at the moment. There are significant areas in technology development where we will continue to spend on R&D to minimise waste forms, to look at better ways of treating waste, to look at accelerating decommissioning timescales, improving safety margins and so on. As I said earlier, one of our key remits under the Act is to make sure that we are at the front end of all that R&D. Q816 Nia Griffith: Did you say "Nexia"? Mr Waite: Yes. Nexia Solutions are owned by BNFL. They are resident at the Sellafield site. They have, from memory, some 800 employees involved in various forms of operational R&D and examination of nuclear materials and so on for a number of customers, not just the NDA, so the MoD, British Energy and so on make use of their skills. We use them to keep tabs on international developments such as the one mentioned by your colleague. Chairman: Thank you both for your evidence today. If you feel, in the light of the discussions and the questions, that you want to add anything further, we would be very happy to receive a memorandum. |