View from City Road: A sell-off too far at Nuclear Electric

Nuclear Electric can only be admired for the stamina of its privatisation campaign. Whether turning in a good financial performance, as it did yesterday, improving its productivity or preaching the need for greater commercial freedom, the message is always the same; privatise us, privatise us.

As John Collier, chairman, eagerly points out, with every bit of extra market share the company gains, the Government's privatisation of electricity supply is rolled back further. He is right. Nuclear Electric now has nearly a quarter of the market and will soon be challenging PowerGen for the number two slot.

The fact of the matter, however, is that the political will to put nuclear power into private hands is not there and will not be for the foreseeable future. The little matter of pounds 11bn in clean-up and decommissioning liabilities is still the biggest practical hurdle. Even Nuclear Electric believes that about pounds 6bn of that will have to remain with the public if the company is privatised.

Sizewell C, the reactor the company wants to build in Suffolk, is another problem. It will cost about pounds 3.5bn and it is unlikely private investors would want to foot the entire bill. The Government is keen to encourage private money for nuclear power investment, but this does not extend to selling the industry off.

The fact is that selling Nuclear Electric is too sensitive for this fragile administration to contemplate. The Post Office and British Rail are headache enough.

The Government's first privatisation priority is in any case the pounds 4bn sale of its remaining 40 per cent in Nuclear Electric's rivals, National Power and PowerGen, pencilled in for early next year.

Mr Collier and his colleagues will have to make a lot of noise for a very long time before they come anywhere near their heart's desire. By that time we'll probably have a Labour government in power and they can forget it for good.