Cleaning up Hanford's K Basins is now expected to cost $274 million more than expected - a 33 percent jump from the project's 1995 predictions.

The Department of Energy formally approved the cost increase earlier this week, after studying recommendations submitted by Fluor Daniel Hanford and DE&S Hanford.

That should lock Fluor and DE&S into a tight, but achievable schedule to remove 2,300 tons of spent nuclear fuel from the K Basins to a storage site in central Hanford, said Charles Hansen, DOE's assistant manager for waste management.

Through most of 1997, Fluor and DE&S have been studying and restudying the K Basins' problems - and proposed cost increases and delays have surfaced throughout the year.

On Wednesday, Hansen said DOE has approved recommendations that will lead to:

Confirming the project's extension of 19 months to be completed in 2003 instead of 2001. This was expected.

A $274 million cost increase accompanying that delay, bumping the overall price tag from $814 million to $1.08 billion through 2003. In November the cost increase was estimated to be $238 million, but it since has grown.

Adding extra tasks, including cleaning leftover contaminated sludge from the basins, which was not in the original plan.

No changes in DOE's fiscal 1998 budget and its proposed fiscal 1999 budget, since the long-expected K Basins increases already were factored into those calculations. The first time the increases will chew into Hanford's predicted tight, flat budgets will be in fiscal 2000.

The K Basins are two huge indoor water-filled pools holding spent nuclear fuel in usually corroded containers a few hundreds feet from the Columbia River. One basin has leaked twice in the past.

The roots of the cost increase date back to 1994 when DOE and then-lead contractor Westinghouse Hanford Co. believed they could put the K Basins project on a faster and cheaper track. Their revisions dropped an original $1.1 billion budget estimate to $750 million in 1994, which got revised to $814 million in 1995.

But that faster, cheaper schedule assumed overly optimistic best-case scenarios on design work, safety issues and other factors, Hansen said.

Fluor and DE&S, which is Fluor's subcontractor in charge of the K Basins, spent late 1996 and most of 1997 redoing Westinghouse's plans.

A major chunk of the cost increase is $70 million to prepare the radioactive sludges in the basins to be stored in Hanford's underground tanks to eventually be converted into glass, Hansen said.

This was not factored into the original plans. Hansen said this likely will save some money later because the future funds won't have be be found to clean the basins after the fuel is gone.

Another major increase is an extra $10 million to build spent fuel container baskets on site, instead of sending that work elsewhere.

Fluor believes it has contractual obligations to the Hanford Atomic Metals Trades Council - the umbrella for many Hanford unions - to keep that work on site, Hansen said.

The delay in completion from 2001 to 2003 also adds to the day-to- day costs.

The delay and cost increase were approved shortly after the Defense Nuclear Facilities Safety Board released a report criticizing how the K Basins project is managed. This board is a safety oversight panel that advises DOE.

A major theme of the safety board's report is that all the numerous individual pieces of the spent fuel removal are not being adequately coordinated as one master planned project.

Hansen said this is a valid criticism, which both DOE and Fluor echo.

Hansen said Fluor and DE&S have been on a learning curve and are improving management of this project - but more improvement is needed.

The safety board criticized DOE's timetable for not providing incentives for Fluor and DE&S to speed up the project.

Hansen said the revised schedule is tight and cannot be realistically sped up. DOE deliberately made the revised schedule as tight as possible, believing contractors would inevitably use any extra fudge time.

Neither DOE nor the safety board believe there are any technical show stoppers in the project. "This is a very difficult and aggressive performance schedule, and we grade on an 'A-plus' performance. A 'B' is not acceptable," Hansen said.