Bush wades in to help GE in BNFL sell-off

Blair lobbied over $4bn disposal of Westinghouse
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The Independent Online

George Bush has been using his special relationship with Tony Blair to push for a US company to win the fight for Westinghouse, the Pittsburgh-based nuclear business put up for sale by its current owner, British Nuclear Fuels.

The discreet lobbying emerged as final bids of about $4bn (£2.25bn) - twice its initial valuation - were submitted yesterday for Westinghouse, acquired by BNFL in 1999.

The US President voiced support for a bid by General Electric, the giant US conglomerate, in a conversation he had with the Prime Minister in recent days. America's Commerce Secretary, Carlos Gutierrez, has also written to Alan Johnson, the Trade and Industry Secretary, backing GE's bid.

The efforts by Mr Bush and Mr Gutierrez reflect mounting concern on Capitol Hill about the ownership of Westinghouse, which designs and builds nuclear reactors. It has been British owned since 1999; despite this, several members of the administration do not now want it to be sold to a foreign bidder.

Two of the final bidders are Japan's Mitsubishi Heavy Industries and Toshiba. Some US politicians fear that one of these companies could share Westinghouse's cutting-edge nuclear technology with China. The third bidder to submit an offer by yesterday's deadline was GE.

In recent weeks Toshiba and Mitsubishi have looked like the favourites because their offers were the highest.

It is possible that GE, which has recently teamed up with another Japanese company, Hitachi, has raised its own offer.

However, if GE were to win Westinghouse without offering the highest price, there could be a political backlash in the UK. The proceeds from the sale, minus $600m for historic clean-up liabilities, would go to the Treasury because BNFL is state owned. If Westinghouse were to go to GE for political reasons, it would be British taxpayers who would suffer financially, which could trigger calls for a judicial review of the deal.

Downing Street would not comment on Mr Bush's remarks to Mr Blair over GE. They are understood to have been part of a wider discussion over the joint strike fighter project.

Mr Gutierrez said in his letter of 12 January to Mr Johnson that "the Bush administration supports General Electric's bid". Neither the DTI nor GE would comment. NM Rothschild, which has handled the sale for BNFL, also declined to comment.

Several other companies have expressed interest in Westinghouse but have dropped out. They include the Louisiana-based engineering company Shaw, whose bid was rejected by BNFL's board and Rothschild in the first round of bidding.

Another group, led by the former Exelon chief executive, Corbin McNeil, and including the private equity firm Texas Pacific Group, also dropped out.

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