Railtrack flotation set for spring



Sir George Young, the transport secretary, is expected to announce tomorrow at the Tory conference that the Railtrack flotation will be in the spring. With Ian Lang, the President of the Board of Trade, likely to confirm on Thursday that the nuclear privatisation is slotted in for summer, the Government appears set on running the two sales in quick succession.

Both advisers and ministers fear that if either of the two controversial privatisations is allowed to slip further it will run dangerously close to the early stages of the election campaign, which is likely to beginin the autumn whatever date is eventually decided for the poll. Sir George has so far stuck to the formula that the privatisation will be within the lifetime of the present parliament, but officials have been working on a timetable for a sale between February and June for some months.

Railtrack has said it will be ready for privatisation in the new year. However, there is increasing reluctance to put the company on the market until it has completed a second full financial year in March. This indicates April at the earliest for the sale, which is expected to fetch pounds 1.5-pounds 2bn. The City is also likely to want further evidence of progress on the privatisation of British Rail Infrastructure Services, the companies which contract with Railtrack to maintain the rail network and which are critical to cutting Railtrack's costs.

The government's hopes of privatising a large part of the nuclear industry by next summer have been overshadowed by the problem of fitting the sale in with the Railtrack flotation. Advisers believe they have convinced ministers that the City will be willing to buy both in quick succession.

There is also a view in the City that the pounds 2.5bn nuclear sale could be delayed if the Government decides to refer the takeover bids by National Power and PowerGen to the Monopolies and Mergers Commission. Both generators have tabled agreed bids for regional electricity distribution and supply companies.

A DTI source said that the effect on nuclear privatisation of a referral would depend on its terms and timing. One possibility is that the desire to sell the nuclear company could tip the balance against a reference in spite of political pressure to call the bids in.

The Government has also to agree conditions with the state-owned British Nuclear Fuels to assume stewardship of the the ageing Magnox plants that are to be left out of the sale. John Guinness, chairman of BNFL, has warned that he will refuse to accept the plants unless the government specifies how the billions of pounds in clean-up liabilities are to be funded.