URS Gets Sellafield Contract Extension - Analyst Blog

A consortium led by URS Corporation (URS) recently received a five-year extension contract from the UK Nuclear Decommissioning Authority (NDA) for the management and operation of the Sellafield nuclear complex in West Cumbria, UK. The contract's annual budget is about $2.9 billion. The consortium, Nuclear Management Partners Ltd. (NMP), comprises three international firms - URS, Areva and Amec Plc.

The contract extension engages the engineering, construction and technical services provider URS-led consortium as the Parent Body Organization. The consortium will be responsible for taking the strategic decisions.

NDA expects NMP to safely accelerate the cleaning up of Sellafield, one of the most challenging and hazardous nuclear sites in Europe. Apart from waste management and commercial operations, NMP will be accountable for the core services including initiating the new construction and managing decontamination and decommissioning the old plants at the site.

The contract was awarded in Nov 2008 with a five-year base period, extendable up to 17 years. NMP has successfully managed the operations of the waste storage facilities to date. NMP has achieved high levels of safety by stabilizing the highly dangerous facilities and taking cost saving initiatives while saving time by being ahead of schedule in cleaning up and retrieving the waste.

The renewed contract requires NMP to continue operating the waste reprocessing and storing facilities at Sellafield along with an engineering design center in Cheshire and two former nuclear stations: Calder Hall and Windscale in West Cumbria.

URS provides a wide range of construction management and technical services for several industries including manufacturing, chemical, pharmaceutical, mining and others. The company excels in providing core services that include everything from engineering roads and harbor to risk management for military weapons systems. The company services government entities as well as private and institutional clients.

URS currently has a Zacks Rank #3 (Hold). Other stocks worth considering at the moment are Michael Baker Corp. (BKR), ITT Corp. (ITT) and Foster Wheeler AG (FWLT). Michael Baker carries a Zacks Rank #1 (Strong Buy), whereas ITT Corp and Foster Wheeler both carry Zacks Rank #2 (Buy).