Troubled Cumbria new nuclear backer Toshiba declares multi-billion loss
The Government needs to "get serious" and step in to make sure Cumbria's proposed £10bn nuclear new build goes ahead.
This call has come from both Labour and Conservative politicians and a leading trade union after Toshiba - which owns NuGen, the company behind plans for a power plant in Moorside, near Sellafield - had made major losses.
The news came as the Japanese giant its much-delayed accounts for the 2016 financial year, which show in this period it made a loss of 965.7bn yen (£6.8bn).
These results were due to be published in February but this has been repeatedly delayed and Toshiba has now published them as it bids avoid being de-listed from the Tokyo Stock Exchange.
Its auditors PricewaterhouseCoopers Aarata signed off the results but have also criticised the company's governance.
Toshiba's woes stem from part of its nuclear operations.
In January the company announced its US subsidiary, Westinghouse Electric, which was originally part of BNFL, may have overpaid - by several billion dollars - for another nuclear construction and services business.
This contributed to losses in its nuclear business which profits elsewhere did not mitigate.
Earlier this year Westinghouse - due to supply three AP1000 reactors to Moorside - filed for Chapter 11 bankruptcy protection in the USA. This led French firm ENGIE, which formerly held a minority stake in NuGen, to trigger shareholder agreements which forced to Toshiba to take full control.
Toshiba has always insisted that it remains committed to the Cumbrian project - though it has long term plans to sell its stake - but this latest news has reignited doubts about the company's engagement.
Its statements to investors regarding its results have not mentioned NuGen or Moorside.
Stewart Young, the Labour leader of Cumbria County Council, was concerned.
He said: "I think this demonstrates that the Government really needs to step in if they are serious about the country's energy policy and want to see Moorside actually delivered they cannot just leave this to the private sector and the markets.
"The Government needs to step in and take a stake if they want the private sector to invest."
He also had concerns about whether Korea Electric Power Corporation (Kepco) - which said in June that it was in discussions with Toshiba about buying into NuGen - was still likely to invest as the country's president Moon Jae-in has announced plans to phase out nuclear power domestically.
Carlisle's Conservative MP John Stevenson said: "I think NuGen will still happen but I do share people's concerns that Toshiba may not be the main driver of that."
"Taking a stake is a decision for the Government to make," he added.
"They cannot be the main driver. I think it would be good for the Government to consider it to give the whole project confidence."
Barrow's Labour MP John Woodcock said: “Moorside is of crucial importance for our nation’s energy security and for the future of our Cumbrian economy.
“These results, while not entirely unexpected, bring into sharp focus the need for the government to stop dithering and take decisive action.
“That might include underwriting the project or stepping up the pace to find new investors – but the time for doing nothing is over.”
Justin Bowden, national secretary of the GMB union, said: "The chaos at Toshiba must shake the Government out of its stupor of inertia and produce action to ensure the zero carbon electricity we vitally need is produced at Moorside.
"The fact Toshiba – a major investor on a vital UK energy project – has published such a dire set of results highlights once again the sheer folly of leaving it to a foreign company to keep Britain’s lights on."
In response to the results NuGen said: “With the support of Toshiba, NuGen’s board is fully focused on continuing its strategic review of options which it initiated in April, following the notification of a change in shareholding, and vendor challenges.
"This process to divest Toshiba’s position has not been affected by the announcements today. NuGen is confident that the review process will lead to an outcome that provides a more robust, stable and sustainable platform to meet our commitment to deliver the next generation of nuclear baseload for the UK.
"NuGen remains a key player within the UK nuclear industry, has a vital role to play within the UK Industrial Strategy, and the Moorside Project remains a key infrastructure project focused on creating employment and economic prosperity in Cumbria and across the north.”
A spokeswoman for the Department of Business, Energy and Industrial Strategy, said: “Nuclear continues to play an important role in our energy mix, which is why last year the Government commissioned the first new nuclear power station in a generation.
"The UK is one of the most attractive countries to invest in new nuclear, and we are working closely with NuGen and a number of other developers on different projects in the UK.”
* Toshiba also published its results for the first quarter of 2017. For the period up to June 30 it made a profit of 50.3bn yen (£325m).