Delays feared for pounds 4bn Grid sale

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The Independent Online

Industrial Correspondent

The pounds 4bn sale of the National Grid Company could be delayed until next year because of the present political "turmoil", according to Sir Bob Reid, chairman of London Electricity. Sir Bob said that the problems facing the Government made it difficult to get the detailed attention that the deal requires.

"I have doubts it will happen in the autumn. It is a Cabinet matter. If you have a new Cabinet you have all sorts of problems," he said. "You cannot push these things - it's in the hands of the politicians."

The 12 regional electricity companies, which own the grid, have yet to agree with the Government how much they should give out in customer rebates when the grid is sold and how much they will pay in windfall tax. There is also disagreement among the companies, with some arguing that if the Government exacts too high a price, the sale should not go ahead

Discussions over the future of the grid have also been clouded by the uncertainty caused by the current review of electricity distribution prices by the regulator, Offer. The results of the review, which has been going on since March, could be announced next week.

London Electricity yesterday brought the electricity reporting season to an end, announcing a drop in pre-tax profits to pounds 172.4m in the year to March after exceptional charges of pounds 42.5m, compared with pounds 186.5m the previous year. The bulk of the charges related to restructuring - with the loss of 476 jobs - while the balance is the premium on redemption of government debt. The underlying pre-tax profit rose by 15.2 per cent to pounds 214.9m and earnings per share increased by 21.2 per cent to 78.8p. The final dividend per share is up by 28.9 per cent to 29p, helped by the buy-back and cancellation of 10 per cent of the shares during the year.

Roger Urwin, chief executive, said that the company's drive into non- regulated businesses, including management of private electricity networks, would provide high-quality warnings into the future. "These will become increasingly important for future dividend growth, particularly after the flotation of the National Grid."

London has already taken over the ownership and operation of the British Airports Authority networks and is hoping for similar contracts from London Underground and the Channel Tunnel rail link. Tentative talks have also been held with Railtrack on how London might run and maintain its electrical installations.

London also revealed that directors' bonuses fell by 2.8 per cent last year and that Mr Urwin's basic pay increased by 2.9 per cent in line with the rest of the staff.