Green price put on power sale

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Investors in the Government's £34bn sale of shares in National Power and PowerGen are assuming responsibility for massive environmental damage, according to Greenpeace, the environmental group. Greenpeace estimates the annual cost of the environmental damage caused by the companies to be £2.9bn, or £16.80 per share.

The Greenpeace campaign yesterday coincided with the Government's launch of the UK public offer, confirming a discount for private investors of 10p per share from the price paid by institutions of 180p for National Power shares and 195p for PowerGen. Kenneth Clarke, Chancellor of the Exchequer, said: "I think talk about environmental issues and emissions should be seen in the context of the £3bn investment made by the companies in improving their environmental performance."

The Government had been forced into a last-minute change in the prospectus for the sale to include allegations by the Labour Party that PowerGen was allowed a substantial debt write-off at privatisation to cover the installation of sulphur scrubbing equipment at Ferrybridge power station in North Yorkshire which was not then fitted. Sulphur emissions from power plants are a major cause of acid rain.

Martin O'Neill, Labour's energy spokesman, put the write-off at £250m and said that a future Labour government would look at "appropriate fiscal and legal measures to ensure that PowerGen has not, in the long run, ended up with something for nothing at the expense of the taxpayer".

A spokesman for PowerGen said that the company was more than meeting its environmental targets, and had spent £1.3bn since 1993. He said sulphur emissions were being cut by the use of more gas-fired plants, which are cleaner than coal or oil based plants.

The row over the environment has done little so far to dampen the enthusiasm of the public investor, with more than three million people having registered by Tuesday night with high street share shops. Mr Clarke said: "This sale has seen share shops come of age." He noted that this is the first time that share shops have not operated alongside a government share registration office. "I think we can let them get on with it in future in private as well as public sales."

Mr Clarke said that the high level of interest in the sale of National Power and PowerGen was in part due to the efforts of the shops but also reflected public desire to own part of the nation's industry.

At least 40 per cent of the shares have been reserved for UK private investors, with more to be clawed back from institutions if demand is high. Mini prospectuses and application forms are expected to be sent out early next week by share shops. The closing date for the UK public offer is 1 March.

The final price will be set by bidding among institutions, beginning on 23 February and ending on 3 March. The price will be announced on 6 March, immediately before dealings in the shares begins.