The arrangement, now under discussion with Group 4, will lead to around 1,200 staff, comprising meter-readers, supervisors and technicians, being moved off the British Gas payroll and into the joint venture. If it goes ahead, staff will be forced to transfer pension arrangements to the Group 4 pension scheme.
Group 4, which two years ago gained a reputation for losing prisoners, beat eight other rivals to become the preferred partnerafter trials in 1994 and 1995.
British Gas wants to finalise the joint venture ahead of domestic competition being introduced in the South-west region on 29 April. That pilot will affect around 500,000 domestic gas customers. Full nationwide competition in the domestic gas market is expected by 1998, when all Britain's 18.5 million domestic customers will choose who supplies them with gas.
This change in organisation is the latest to come out of British Gas, which in February announced it was splitting the main business in two. Transco International will handle pipelines and gas storage while British Gas Energy will look after gas sales.