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Privatisation gone awry
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Privatisation Gone Awry? n her ideologically-driven dash
I to privatize the British electricity industry two years ago; thenPrime Minister Margaret Thatcher and her advisors were widely suspected of having unloaded the various generating and transmission companies at as little as one-third of their book value. The exception was the nuclear component of the indusq, which investors refused to buy at any price. Proof of the scale of the giveaway came in mid-December when the House of Commons committee on public accounts released its report on the sale of the 12 British regional electricity companies. Despite being dominated by members of Thatcher’s and present PM John Majol/s Tory party the committee complains that British taxpayers have not benefited from the higher-than-expected profits made by the regional companies after the 16 billion pounds sterling privatization. Thatcher’s own civil servants, their advisors (including many American consulting firms) and officials of the companies themselves were to blame for the lowball profit forecasts, the report implies. And the study gives short shrift to pleas by civil servants to the committee that the prospects of a Gulf war affected their decisions on the timing and pricing of a sale. Very little British electricity was generated by oil, the Members of Parliament pointed out.
Januay/Februa y 2993
NEWS
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The system used by the UK Department of Energy to recruit financial advisors to handle the sales was also sharply criticized in the House of Commons report. DOE appointed 53 advisors, of whom 16 were named without any competitive bidding, the report reveals. Thatcher ‘s political goal of broadening and deepening the “share-owning democracy” does not seem to have worked very well in the case of electricity Going (perhaps wisely) for short-
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c
u
s
in profits.
At the same time as the House of Commons committee was reporting,‘Scottish Power (a generating and distribution company) announced a 16% increase in six months pre-tax pmfits, Norweb (one of the distribution companies) declared an 11.1% pm-tax increase and the National Grid Co. said that it had a 9.7% increase in interim pretax profits. For a copy of the report, ask for: House of Commons Committee of Public Accounts 16th Report: The Sale of the 12 Regional Electricity Companies (Stationery Office, 10.75 pounds, Dec. 1992).
ing
Chelan PUD Brings ‘Em in From the Cold
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term profits, most of the small investors have now bailed out of the regional companies. The number of shareholders has plummeted from nine million to three million since the flotation two years ago. Meanwhile, in defiance of one of Britain’s worse recessions in decades, both regional distribution companies and the two big UK generating companies are rak-
ow big a role should utilities play in the social life of their communities? In generally conservative eastern Washington, the Chelan Co. (Wash.) Public Utility District decided to help alleviate its community’s homeless problem when the PUD’s commissioners told staff to work out an arrangement with the city and a local housing coalition to use a second floor section of a PUD building as a shelter for the homeless this winter. The PUD, headquartered in Wenatchee on the Columbia River, serves east of the Cascade Mountains, where some of the coldest temperatures in the state are seen.
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H
E
Privatisation Gone Awry? n her ideologically-driven dash
I to privatize the British electricity industry two years ago; thenPrime Minister Margaret Thatcher and her advisors were widely suspected of having unloaded the various generating and transmission companies at as little as one-third of their book value. The exception was the nuclear component of the indusq, which investors refused to buy at any price. Proof of the scale of the giveaway came in mid-December when the House of Commons committee on public accounts released its report on the sale of the 12 British regional electricity companies. Despite being dominated by members of Thatcher’s and present PM John Majol/s Tory party the committee complains that British taxpayers have not benefited from the higher-than-expected profits made by the regional companies after the 16 billion pounds sterling privatization. Thatcher’s own civil servants, their advisors (including many American consulting firms) and officials of the companies themselves were to blame for the lowball profit forecasts, the report implies. And the study gives short shrift to pleas by civil servants to the committee that the prospects of a Gulf war affected their decisions on the timing and pricing of a sale. Very little British electricity was generated by oil, the Members of Parliament pointed out.
Januay/Februa y 2993
NEWS
IN
F
The system used by the UK Department of Energy to recruit financial advisors to handle the sales was also sharply criticized in the House of Commons report. DOE appointed 53 advisors, of whom 16 were named without any competitive bidding, the report reveals. Thatcher ‘s political goal of broadening and deepening the “share-owning democracy” does not seem to have worked very well in the case of electricity Going (perhaps wisely) for short-
0
c
u
s
in profits.
At the same time as the House of Commons committee was reporting,‘Scottish Power (a generating and distribution company) announced a 16% increase in six months pre-tax pmfits, Norweb (one of the distribution companies) declared an 11.1% pm-tax increase and the National Grid Co. said that it had a 9.7% increase in interim pretax profits. For a copy of the report, ask for: House of Commons Committee of Public Accounts 16th Report: The Sale of the 12 Regional Electricity Companies (Stationery Office, 10.75 pounds, Dec. 1992).
ing
Chelan PUD Brings ‘Em in From the Cold
H
term profits, most of the small investors have now bailed out of the regional companies. The number of shareholders has plummeted from nine million to three million since the flotation two years ago. Meanwhile, in defiance of one of Britain’s worse recessions in decades, both regional distribution companies and the two big UK generating companies are rak-
ow big a role should utilities play in the social life of their communities? In generally conservative eastern Washington, the Chelan Co. (Wash.) Public Utility District decided to help alleviate its community’s homeless problem when the PUD’s commissioners told staff to work out an arrangement with the city and a local housing coalition to use a second floor section of a PUD building as a shelter for the homeless this winter. The PUD, headquartered in Wenatchee on the Columbia River, serves east of the Cascade Mountains, where some of the coldest temperatures in the state are seen.
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