Welsh Water retrenches

WELSH WATER, the privatised utility, is to withdraw from providing pipeline services as part of a rationalisation of the non-regulated side of its business, writes John Murray.

Beacon Pipeline will stop bidding for external contracts but will continue to serve the water business, into which it will be absorbed. Daniel Pipelines, its sister company, is being offered for sale, possibly to a management buyout.

The pipeline businesses have been making losses running into seven figures. Welsh Water said about 100 jobs would go as a result of the restructuring. The cost of the reorganisation and any associated write-offs would not exceed pounds 1m.

It said the move was part of a strategy of concentrating on the core activities of water and engineering services. Hamdden, its leisure business, is also being absorbed into the group.

A spokesman said the company was in talks with several hotel chains about signing a management or lease contract for Welsh's five hotels. An agreement with Resort Hotels fell through when Resort met financial difficulties late last year.

The shares fell 1p to 687p.