Eastern Electricity to axe 450 jobs and raise capital spending
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Your support makes all the difference.EASTERN ELECTRICITY is to cut 450 jobs in a restructuring of its power distribution business. The company also plans to increase capital expenditure in the electricity network by about 30 per cent to an annual pounds 100m for the next five years.
A further 650 staff will be redeployed from the day-to-day running of the distribution business to work on the implementation of the capital expenditure programme. Eastern said the restructuring would save the company pounds 25m a year by 1996-97.
John Devaney, chief executive, said the changes were the result of a year-long evaluation of the business. He rejected the suggestion that they were prompted by the recent review of distribution prices by Offer, the regulator.
Under the new controls, Eastern must cut distribution prices by 11 per cent next April and thereafter keep within a cap of inflation minus 2 percentage points. Several regional companies have announced heavy job losses since the price review and City analysts predict a total of 10,000 employees will go over the next few years.
Unions attacked the latest job cuts. Paul Gallagher, general secretary of the Amalgamated Engineering and Electrical Union, said: 'The privatised electricity supply companies are thrashing about, continuing to cut jobs so that shareholders' dividends can be kept high.'
Meanwhile, Norweb, the regional company in north-west England, has become the first of the privatised electricity companies to list its shares on New York's Nasdaq stock market. The company said that more than 5 per cent of its shares were already held in the form of American depositary receipts and the listing would give US investors greater liquidity.
National Power and PowerGen, the generators, intend to list their shares in New York and other regional companies are expected to follow suit. PowerGen said it intended to go ahead with its listing before the Government's sale in February of its remaining 40 per cent stake in the generators.
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