Nuclear generator to shed 3,500 more jobs

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The Independent Online
NUCLEAR ELECTRIC is to cut 3,500 more jobs over the next three years in its drive to reduce costs. The company's workforce has already shrunk from more than 14,000 two years ago to 12,400.

The job losses, attacked by unions as 'totally unexpected', were disclosed as state-owned Nuclear Electric announced a 48 per cent increase in operating profits from pounds 326m to pounds 482m in the year to 31 March.

The company benefited from a pounds 1.26bn subsidy in the form of a levy on electricity bills, without which it would have made a loss of pounds 778m.

Turnover rose to pounds 2.43bn from pounds 2.2bn a year earlier.

Nuclear Electric's share of the electricity generating market in England and Wales increased in the period from 17.4 per cent to 18.5 per cent.

John Collier, chairman of Nuclear Electric, forecast the company would achieve operating profitability by 1995, independently of the levy. However, it is unlikely that the Government will abolish the subsidy until the scheduled date of 1998, as Nuclear Electric's cash flow forms part of the public sector borrowing requirement.

The company has made provisions of pounds 250m to cover job cuts. These costs, coupled with financial charges related to Nuclear Electric's pounds 8bn waste disposal and decommissioning liabilities, meant that net profit was pounds 62m last year. This compares with a loss of pounds 14m in 1990/91.

Mr Collier said: 'After only two full years as a company, Nuclear Electric has achieved much more than many expected at the time of electricity privatisation, and there is more to come.'

He said that the company would continue to drive down costs to become competitive with electricity generated from coal and gas. Generating costs per unit of electricity are to drop from 3.9p per unit to about 2.8p in 1995.

Mr Collier said only the Government could decide whether Nuclear Electric could be privatised. The issue of liabilities related to nuclear waste management and decommissioning of plant would need to be resolved, but investors might be interested in the company's modern power plant.

These include the pressurised water reactor under construction at Sizewell B in Suffolk. Nuclear Electric plans to build a family of PWRs pending the outcome of the government review in 1994 of the nuclear programme, which is now frozen.