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August 22, 2007
Federal officials have approved the start of preliminary design work on a new production center for the Y-12 nuclear weapons plant, and a Y-12 spokesman acknowledged this week that the cost of the proposed project could reach $3.5 billion — far more than previous estimates.
Steven Wyatt, a spokesman for the National Nuclear Security Administration in Oak Ridge, said there is no firm price tag for the Uranium Processing Facility at this point, but he acknowledged that the cost range for the project is $1.4 billion to $3.5 billion.
The highest previous estimate disclosed publicly was $2 billion, which Y-12 general manager George Dials reported during a meeting with the News Sentinel earlier this year. At the time, Dials said the working estimates ranged from $1.4 billion to $2 billion. When first proposed a few years ago, Y-12 officials said they expected the UPF to cost about $1 billion.
In an e-mail response to questions about UPF earlier this week, Wyatt confirmed that Oak Ridge officials recently received the go-ahead for Critical Decision-1, which is federal parlance to begin preliminary design work on a major construction project.
The Uranium Processing Facility would replace the main 9212 production complex at Y-12, which manufactures nuclear warhead parts — specializing in so-called secondaries, the second stage of thermonuclear weapons. UPF is considered a key part of the modernization program at Y-12.
A new storage facility for weapons-grade uranium is already under construction at Y-12. According to plant officials, the storage facility — known formally as the Highly Enriched Uranium Materials Facility — is about 60 percent complete. The current cost of that project is $549 million, which is more than twice the initial estimates.
Clay Sell, the deputy secretary of energy, gave Y-12 permission to proceed with preliminary design work on UPF following a July 25 presentation in Washington, Wyatt said. A formal authorization letter from Sell is expected soon, he said.
Work on the preliminary design is now under way, Wyatt said.
According to Wyatt, the currrent cost range for the UPF allows “significant consideration” for uncertainties and unknowns.
“The actual cost baseline for the project will not be developed until preliminary design is mature enough to objectively quantify the scope and validate the total estimated cost,” the federal spokesman said.
Establishing a “performance baseline” for the project, which includes an official cost estimate, is a pre-requisite to getting approval of Critical Decision-2, tentatively scheduled for 2010. The actual project is not likely to be completed until 2015 or beyond, based on earlier reports by Y-12 officials.
“Based on the process used to develop the cost range, it is reasonable to anticipate that the project's baseline will be set at a number between $1.4 billion and $3.5 billion,” Wyatt said.
Wyatt said the UPF is an important project, from both a production and a safety standpoint.
“UPF will replace the heart of the Y-12 manufacturing complex, moving operations from 60-year-old facilities with outdated equipment into a new consolidated facility,” he said. “The new facility will have enhanced facility safety and worker health features designed into the facility and processes.”
The cost, however, is sure to bring additional controversy to the big project.
Peace activists have already protested the billions of dollars being spent on Y-12 modernization, saying there is no need for new weapons.
Even one of the plant's biggest supporters, U.S. Rep. Zach Wamp, R-Tenn., recently said there has to be a cap on spending — even on national security projects. Wamp said the government needs to look at ways to control escalating costs, as well as look at creative ways to finance the big projects — perhaps looking outside the traditional funding mechanisms through Congress.
Two major new facilities at Y-12, the Jack Case Center and the New Hope Center, which collectively will provide offices for about a third of the Y-12 work force, were built via private financing. Those facilities were developed by Lawler-Wood of Knoxville and are leased to BWXT, the government's managing contractor at Y-12.
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