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NATIONAL GRID TRANSCO SALE - GMB TALKS UPDATE

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Date / 3rd September 2004

Emerging from talks with prospective buyers of four of the nation's gas distribution networks, GMB National Secretary Brian Strutton said:

"The GMB today met with United Utilities who will take over gas distribution in the North of England, Macquarie who will take over Wales and the West, and held a telephone conversation with Scottish and Southern who will take over Scotland and Southern England.

"We were unable to meet with National Grid Transco (NGT). We had asked for written evidence of pensions guarantees or verbal assurances from NGT, which we have yet to receive.

"From each buyer we had intimations of very different deals which, evidently, have been struck for different parts of the country, where United Utilities and Scottish and Southern are part of financial consortia that will own the gas pipes and other assets and will operate a separate contract to maintain and run pipes and other assets. Separately, Macquarie appear to be setting up a new company and appointing people to manage and run Wales and the West.

"The GMB also explored with these companies what their plans and understandings are on pensions and we got differing, perhaps confused, answers that in no way set our minds at rest.

"We also explored the companies' plans for the workforce and how they intended to operate their gas networks, but none were able to give clarity on these matters and in fact did not really seem to know.

"Despite our efforts today, we have not yet dealt to our satisfaction with any of the issues that concern GMB members working in the industry.

"The GMB will now seek meetings and written assurances from NGT. We will also be entering a series of separate dialogues with each of the three prospective buyers. These are options to sale and buy which come up next spring, so these are far from done deals."

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