Friday, August 01, 2008

Nuke Plants Sell-Off Blow To Brown

The £12 billion deal to buy the UK's nuclear power stations has been called off for the time being, in a further blow to Brown's nuclear plans and efforts to raise cash for his struggling economy. The deal will be back on the cards when the time is right. 

French government-owned EDF, along with British Gas owner, Centrica, had been widely expected to announce it was buying British Energy, which owns nuclear reactors in the UK.

Then, out of the blue, EDF put out a statement in the middle of the night, saying "conditions were not right" to proceed with the deal. British Energy too wasn't happy with the offer.

Centrica sparked outrage when it raised gas prices by a staggering 35% and still managed to make £1b profit. EDF, of course, raised gas prices by 22% and was due to announce its half-yearly profits today. 

Hiking up gas prices, reporting huge profits, then buying nuclear plants with the cash, just wouldn't look good. 

The government has a 37% stake in British Energy and the nuclear power industry is one of the last things left for Brown to sell. 

The EDF deal would have made around £4 billion for government coffers and paved the way for Brown's big ideas on nuclear power.

The government had done all the groundwork to sell off British Energy - and even considered selling it to the Saudis.

Regardless of the bad timing, the EDF deal would have been controversial. Questions would have been asked whether the UK's nuclear power industry should be placed in the hands of a French government company. Better to bury the sale on a bad news day.

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