New pressure on British Gas to sell £17bn `jewel'

Pressure is mounting for Transco, the Britsh Gas pipeline arm, to be hived off as a separate subsidiary within the group.

The company's pipeline and storage assets are thought to be worth about £17bn and forms the heart of British Gas.

Groups such as Hanson see it as the jewel in the crown of the gas sell- off.

The Conservative backbencher, Alan Duncan, has tabled an amendment to the Gas Bill, currently in committee stage in the House of Commons, demanding that any gas transporter should have separate accounts and management from any public gas supplier.

Mr Duncan's amendment proposes that any gas transporter should be a separate legal entity from any gas supplier and should "confine his activities to the transportation of gas". It does not preclude the transporter from being wholly-owned by a gas supply group. The Gas Consumers Council has also called for Transco to be split off as a wholly-owned subsidiary,a prospect British Gas views with alarm.

British Gas is already dividing its core British gas business into several units in preparation for competition in the domestic gas market next year. Under the new system, Transco will operate at arm's length from gas supply and have separate accounts.

However, rival suppliers to British Gas, including electricity firms and North Sea producers that need to use the pipes, are worried that they will still be at a disadvantage to Britsh Gas's own supply operations. The Gas Consumers Council plans to write to MPs across the House, urging them to support Mr Duncan's "critical" amendment.

Ian Powe, director of the GCC, said that unless Transco was completely separated, there would be a question over the ability of Ofgas, the regulator, to control transportation charges. These account for 40 per cent of the price paid by consumers. Mr Powe said that unless the Government bit the bullet and agreed that Transco should be a separate subsidary, British Gas rivals would never believe they were being treated as equals.

He argues that continued corporate control of the pipelines could allow true asset values and rates of return to be to be hidden. The result is that faith in the regulatory system could be undermined, he said.

A spokesman for Ofgas said that the regulator was happy with the existing arm's length arrangement for Transco but said: "We keep the matter under review."

Separately, Transco has run into problems with its invoicing system, making it difficult for rivals to get the information they need to accurately charge their industrial and commercial gas customers. The problem is being looked at by Ofgas and could result in British Gas paying compensation. It is thought that the computer system is unable to properly keep track of customers who switch suppliers.

There is concern that the problem could be repeated on a magnified scale when the domestic market is opened to competition. British Gas has warned of the complexities involved in coping with the switch from a monopoly to a multiple suppliers.

Competition starts with a pilot phase next year but, by the end of 1998, 18 million customers now supplied and billed by British Gas could have a choice.

The computer system will have to ensure the bills from gas suppliers go to the right person. Before competition can begin, a "network code" will need to be in place, agreed by the industry, to make sure the amount of gas going into the national pipe network daily matches demand.

Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
PROMOTED VIDEO
News
A cabin crew member photographed the devastation after one flight
news
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Life and Style
food + drink
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
Life and Style
fashion
Arts and Entertainment
The John Peel Lecture has previously been given by Pete Townshend of The Who, Billy Bragg and Charlotte Church
musicGodfather of punk will speak on 'free music in a capitalist society'
News
peopleAt least it's for a worthwhile cause
News
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments