WESTINGHOUSE, a company that helped pioneer the development of nuclear energy, has filed for bankruptcy protection in the US.
The collapse of Westinghouse, which built the world’s first commercial nuclear reactor in 1957, has been blamed on cost overruns at two nuclear plants that the company is building in the US. The problems are putting the future of its Japanese parent Toshiba at risk, which has warned that the write-down of its US nuclear business could see losses exceed US$9bn – almost three times its earlier estimate.
A third-party has lent Westinghouse US$800m to finance its activities during its efforts to restructure the business.
Westinghouse’s interim CEO José Emeterio Gutiérrez said: “We are focused on developing a plan of reorganisation to emerge from Chapter 11 [bankruptcy protection] as a stronger company while continuing to be a global nuclear technology leader.”
It is unclear whether Westinghouse will be able to complete the construction of the two US nuclear plants in Georgia and South Carolina, which are billions of dollars over budget and around three years behind schedule.
The reasons for Westinghouse’s downfall are complex. Toshiba has been criticised for overpaying for Westinghouse, which it bought for US$5.4bn in 2006, and for the nuclear construction business CB&I Stone & Webster that it bought in 2015. These self-inflicted issues have been compounded by the safety concerns surrounding nuclear generation following the Fukushima meltdown and increased competition brought about by the falling gas prices and maturing renewables technologies.
Toshiba said the bankruptcy will not affect Westinghouse’s UK business, which employs more than 1,000 staff. It remains to be seen what impact it will have on its plans for new nuclear construction in the UK. Toshiba has a 60% stake in NuGen, which has the contract to build the new Moorside nuclear plant in Cumbria.
A Toshiba spokesperson told the BBC that the company was “assessing the feasibility of the project, but at the moment, nothing is decided.”