Harris tipped to head new coal body

JOHN HARRIS, the high-profile chairman of East Midlands Electricity, is emerging as front runner to become head of the Government's new Coal Authority, which will take over responsibility for licensing mines from British Coal, due for privatisation later this year.

East Midlands surprised the City last month by announcing that Mr Harris, 55, would retire early on 30 April and be replaced on a part-time basis by Nigel Rudd, chairman of Williams Holdings.

Mr Harris said at the time that he was looking forward to pursuing business interests outside the electricity industry, where he has worked 38 years.

Industry sources said the Government was expected to name the head of the Coal Authority within the next few weeks. Mr Harris was not available to comment.

At East Midlands, Mr Harris demonstrated his interest in coal privatisation by becoming involved with a consortium led by the Union of Democratic Mineworkers, which was interested in taking over mines. The plans, thought to have caused friction within the East Midlands Electricity board, were dropped.

The Coal Authority, to be established through the Coal Bill privatising the industry, will own the coal reserves and license mining companies. Based in Nottingham, it will not be allowed to mine coal.

The Authority will also be responsible for some of British Coal's liabilities, including those related to land subsidence on the site of old mines.

Analysts said that the appointment of Mr Harris would make sense. One commented: 'As someone who understands the major customers of the coal industry and the issues, it is a job he could well take on.'

The Government has said that it will sell the coal industry in up to five regional packages of opencast and deep-mined coal. The opencast mines are among the most profitable and expected to attract most attention. British Coal has only 17 operating deep mines left, although two more are expected to come on stream over the next 18 months.

The company is coming under increasing pressure from natural gas, nuclear power and private companies including RJB Mining and Coal Investments. British Coal sales to the generators, National Power and PowerGen, will fall to 30 million tonnes this year from 40 million tonnes last year. Industry sources say that more pit closures cannot be ruled out. On Thursday, National Power announced the closure of five coal-fired power plants.