GAO cites skyrocketing costs for Hanford plant

WASHINGTON – Poor management by the U.S. Department of Energy, mistakes by a private contractor and technical challenges are to blame for skyrocketing cost estimates for a new waste treatment plant at the Hanford Nuclear Reservation, a new report says.

In testimony submitted to Congress on Thursday, the Government Accountability Office said it will cost nearly $11 billion for a new plant to dispose of millions of gallons of radioactive waste at the sprawling Washington state complex.

That figure is in line with a report this week by a team of experts assembled by the Energy Department, who estimated the cost at about $11.3 billion. But it is nearly triple the $4.3 billion cost estimated in 2000, when the current contractor took over the long-delayed project.

“Contractor performance problems, DOE management shortcomings and difficulties addressing various technical challenges encountered during design and construction” all contributed to the cost overruns, the GAO report said.

Specifically, the report said Bechtel National Inc., the Maryland company hired to build the plant for the Energy Department, “has performed poorly” since taking over the project six years ago.

“Bechtel significantly underestimated the price of steel and how much engineering effort would be needed to complete facility designs,” the report said.

Those mistakes added at least $2 billion to the project costs.

Bechtel also failed on several occasions to ensure that nuclear safety requirements were being met, the report said, including failure “to detect serious construction flaws in tanks that will hold radioactive materials.”

Bechtel’s president, Tom Hash, acknowledged the company’s mistakes, but pledged to do better.

“We have a solution in front of us to finally solve a 60-year-old environmental nightmare,” Hash told members of the House Appropriations energy and water subcommittee.

The company, a subsidiary of engineering giant Bechtel Group, was fined nearly $200,000 last month for violating nuclear safety requirements – the latest in a series of problems with the treatment plant, which will convert millions of gallons of radioactive waste into glasslike logs for permanent disposal. The waste now is stored in leaking underground tanks near the Columbia River.

The so-called vitrification plant has long been considered the cornerstone of cleanup at the highly contaminated Hanford site, which was created in the 1940s as part of the top-secret Manhattan Project to build the atomic bomb.

Hash told House members that the project has proved more complex than even his best engineers predicted, but added that he was confident the federal government could “intelligently and responsibly spend $690 million” on the project in the budget year that begins Oct. 1, as President Bush has proposed.

That figure is $200 million higher than current spending, which was slashed after members of Congress and the Bush administration became concerned about cost overruns and other problems.

Washington Reps. Norm Dicks and Doc Hastings said the budget cuts have hurt the project and could cause more delays.

Hastings, a Republican whose district includes Hanford, said no one is more invested than the local community in making sure the project is done right.

“When this nuclear waste is in your backyard – and I can literally see Hanford out my kitchen window – you want to make absolutely certain that DOE is doing its job,” Hastings said.

The GAO report faulted the Energy Department for a “fast-track” approach to design and construction, calling it dangerous for such a one-of-a-kind, complex project involving potentially deadly nuclear waste.

“DOE also did not establish project management requirements,” and top officials in Washington, D.C., did not evaluate the project or Bechtel’s performance, the report said.

Rep. Mike Simpson, R-Idaho, questioned whether the Nuclear Regulatory Commission should assume oversight of the troubled project, which now is overseen by the Energy Department, with assistance from the Defense Nuclear Facility Safety Board, an advisory panel that can be overruled by Energy Secretary Samuel Bodman.

“I don’t think it’s good enough to say (to the Energy Department), ‘Go forth and sin no more,’ ” Simpson told safety board Chairman A.J. Eggenberger.

“They do the right thing eventually,” Eggenberger replied.

“That’s part of the problem, sir: eventually is the key word,” said Rep. David Hobson, R-Ohio, the subcommittee chairman. “Usually it’s after we whack them.”