Taiwan blow for Nuclear Electric

Nuclear Electric has been dealt a blow by a decision to put on hold plans for a Taiwanese power project worth about £3bn. The British firm was hoping to hear this week that its consortium had won the contract, which would have brought about £1bn of work to the UK.

The uncertainty over the Taiwan scheme could not have come at a worse time for Nuclear Electric as the Government decides whether it should be privatised. The controversial issue of a sale - and that of whether to merge Nuclear Electric and Scottish Nuclear - will be discussed by the Cabinet today.

Nuclear Electric is bidding jointly for the Taiwanese contract with Westinghouse of the US. The main rival is the Swedish Swiss group, Asea Brown Boveri, while a third, Framatome of France, is believed to have dropped out. Each of the top two contenders is thought to have bid above the ceiling set by the government of Taiwan, although the authorities said that the project was not dead.

Had Nuclear Electric won, the power station would have been roughly equivalent to two Sizewell Bs - its new plant in Suffolk - and would have acted as a springboard for the company's expansion overseas.

Nuclear Electric has told the Government that globalisation is essential to its long-term strategy and that the merger with Scottish Nuclear - vehemently opposed in Scotland - would underpin its ambitions.

The setback also coincides with consideration of whether to scrap the "nuclear levy" on electricity bills, worth £1bn a year.

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