Nuclear Electric sheds 2,000 in bid for freedom: State subsidy turns interim loss into doubled profits of pounds 497m

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The Independent Online
NUCLEAR Electric, the state- owned nuclear power generator, is cutting 2,000 jobs this year in its efforts to drive down costs. The company said 724 people went in the first half of the year, and a further 1,300 would go by the year-end.

Nuclear Electric, which is keen to be privatised, increased its operating profits by 95 per cent to pounds 497m in the six months to 30 September, from pounds 255m a year earlier.

However, without a subsidy of more than pounds 615m, raised through a levy on electricity bills, the result would have been an interim loss of pounds 118m. The levy, which for the full year is more than pounds 1bn, is due to expire in 1998.

The company raised its share of the electricity generating market to 25 per cent in the first half, from 21.4 per cent in the same period of 1992.

Nuclear Electric said the main reason for the improved results was a better performance from its advanced gas- cooled reactors, as well as increased output from the ageing family of Magnox power plants. The company says it will be ready for privatisation in 1995, when it expects to be profitable without the nuclear levy. The Government has suggested that any privatisation is a much longer-term issue.

Dr Bob Hawley, chief executive, said costs per unit of electricity generated were falling rapidly and could soon be the lowest in England and Wales. In the first half, productivity was up 37 per cent on the same period last time.

The timetable for the company's flagship project, the Sizewell B pressurised water reactor under construction in Suffolk, has slipped back a couple of months from May 1994. Nuclear Electric said the May deadline, set internally, had always been considered very demanding.

Nuclear Electric has now applied for a 'second-tier' electricity licence that will allow it to supply large industrial and commercial users directly, rather than selling through the electricity trading pool.

(Photograph omitted)