The Clinch River fast breeder reactor, the flagship research project for the nuclear industry, is a management fiasco and a growing financial disaster, according to a draft report prepared by a House Energy and Commerce subcommittee.
Congress is expected to decide this week whether to appropriate money for the Tennessee project, which has been bounced between Congress and the White House for five years. The Carter administration tried to kill the project, but President Reagan, an advocate of nuclear energy, left $250 million for Clinch River in his pared-down fiscal 1982 budget.
But in a report timed to hit just before the Hill vote, the House oversight and investigations subcommittee states that the estimated cost of the project has jumped from $669 million to $3.2 billion -- a cost overrun of 450 percent -- and its much-ballyhooed technical achievements may be greatly overestimated.
Supporters of the project are prepared to put up a stiff defense, laying a good part of the blame for the cost overruns on inflation, as well as on politics: if the Carter administration hadn't delayed the project in its efforts to kill it, their argument goes, the price tag wouldn't be so high.
But other elements of the staff report, supporters of the demonstration reactor conceded, will be more difficult to explain.
One of its reasons for its political support over the years has been the promise of the breeder reactor; it uses cheap, low-grade uranium and produces as a by-product another nuclear fuel, plutonium.
Chief among the criticisms of the project is what the subcommittee staff called the most serious example of bad management -- the "unbelievably loose" unenforceable contracts written with Westinghouse, the prime contractor.
"The principal prime contracts have been written without binding provisions for cost, schedule, or specific technical performance," says the report. "It is not clear whether this bizarre practice is a symptom or a cause of the state of disarray in the project. . . . With these contracts, the prime contractors have no necessity to perform, much less to excel -- and they haven't."
A. Ernest Fitzgerald, the Air Force cost watchdog who was lent to the subcommittee for this project, said, "I have never heard of contracts like this. The project director, [Lochlin] Caffey, said he'd never heard of contracts like this before he got onto the project. I think it was very decent of Westinghouse to do any work, because it is not clear they have to do anything at all under these contracts."
A spokesman for Rep. Albert Gore Jr. (D-Tenn.), whose district holds many of the Clinch River workers and who has been a supporter of the project, said, "I don't think there is any doubt that appears indefensible. The best explanation we have been given is that they were dealing with a unique operation. . . ."
The staff report also charges that:
The steam generators, a key component of the reactor, have so far failed to work, and the government has paid $143 million for two generators instead of the $56 million for 11 generators originally in the contract. The overrun on the steam generators could come to 1,000 percent.
In 1977, when the Nuclear Regulatory Commission was pulled off further safety inspections in a Carter attempt to quash the project, there were still more than 100 unresolved safety problems, some of them enough to cause serious accidents or even an explosive core meltdown if uncorrected.
The Department of Energy is considering a move to circumvent NRC safety requirements as well as an updated environmental impact statement required by EPA by taking the reactor from NRC jurisdiction and putting it under DOE jurisdiction.
In 1973, a demonstration of the breeder was promised for six years later. In 1981, two years past that original estimate, a demonstration of the breeder is promised nine years from now at the earliest. NRC safety requirements alone could set the project back another four years -- 11 years past schedule.
The project originally was to be a joint venture between some 800 utility companies and the government, with the utilities bearing the largest share. After a billion dollars has been spent, the government has borne more than 90 percent of the cost, and by the end of the project will have spent more than 30 times the amount of taxpayer liability originally promised.
The initial promise of the breeder reactor was to make more fuel than it burned. But after 12 years of work and political battles, the ground where the breeder was to stand is still empty. Parts are scattered in warehouses, waiting.
At a hearing today, project officers and DOE officials are expected to respond to charges that could keep those parts in the warehouse. DOE spokesman Ron Getz at the breeder office in Oak Ridge, Tenn., said, "We will make a good case for the management of the Clinch River project. Most of the allegations we have heard are totally untrue and without merit whatsoever. . . . We will be vindicated."
Getz would not elaborate on DOE's case, but Gore's spokesman outlined some of the arguments that will be used to justify what happened at Clinch River on some, but not all, points.
On the costs, "pure inflation is a major factor," Gore's spokesman said. In an attempt to kill the project, he said, President Carter greatly slowed its progress beginning in 1977, thus aggravating delay and inflation.
"The other thing that is a really important factor is that they were dealing with a technology never built before. They may have been naive when they thought they could build something totally new for a fixed cost. But that's what they did," Gore's spokesman said. "There may have been too much ambition . . . too much optimism for such a unique technical innovation."
"Certainly the overall cost overruns are alarming. The problem now is to prevent future escalation, and find out beginning tomorrow [the Monday hearings] whether the escalation is a result of uncontrollable factors or bad management. We don't know the answer to that yet."
Also in the subcommittee report were instances of bribery and fraud by two employes who have since been fired, and two possible cases in which, according to the report, subcontracting officials "set up phony companies to which they awarded contracts at wildly inflated prices. For example, the FBI found one of the companies had a contract to supply tubing to Atomics International, worth $22 and $36 to the government, for $185 and $305 per unit."
The two officials in question were fired and the FBI is still investigating the affair.