NGT Gas networks selloff-threat to public safety ?

Heads up people,theres another Railtrack coming along shortly!!.

Some may have seen recent reports about possible shortages of Gas this Winter. This is just another symptom of the general malaise which has afflicted the Gas industry since the privatisation of British Gas.

Briefly the system works as follows, Transco , or National Grid Transco as they are currently called (for this week at least!!),owns and operates the distribution network from Beach to meter. They also own nearly all meters and respond to gas emergencies of all descriptions. Transco's operations are a regulated business because they are a near monopoly ,and rightly so for reasons of public safety.

You buy your gas from a "gas shipper" be it British Gas, Energi or a host of other companies. Transco carries out work on behalf of shippers who respond to customer requests.

Because Transco is a regulated monopoly ,they are subject to a periodic review by Ofgem. This periodic review basically means a three(?) yearly meeting during which,in all past meets,Ofgem has forced Transco to drive up efficiency,cut costs and work harder to reduce its transportation costs which form part of your cost of gas charges as Transco charges shippers to shift gas through its network.

This continual erosion of Transco's operating costs has now reached crisis point. There are too few staff,too few engineers and maintenance of the gas network has been cut back severely over the years to try to tow the line which Ofgem sets.

Added to this,many gas holders and storage sites have been dismantled and sold off thus reducing the storage buffer which the company holds to cope with peak demand,hence the threatened gas shortage.

There is a nationwide shortage of good quality skilled gas engineers and Transco policy for quite a while has been to cut back on recruitment/training. Many engineers are working excessive hours,especially in cold weather,to try and respond to customers within prescribed standard times.

National Grid Transco has to respond to its shareholders. The share price has been depressed for quite a while and the board of NGT have been under pressure for some time to try and stimulate a rise in the share price.

The latest scheme is to consider the sell off of entire chunks of the network,complete with workforce,lock stock and barrel to any interested party who comes up with the cash.

The Transco empire consists of eight(?) areas which cover all of England,Scotland and Wales. These are known in NGT speak as LDZ's (local distribution zones). Some LDZ's are more profitable and therefore more attractive than others and it is these better performing LDZ's which are at risk of sell off ,especially Scotland and the North West.

I can think of only two reasons why an outside interest would want to buy an LDZ. One is to get hold of the capable workforce (remember,gasmen are scarce) and the other is to make a profit. How though could they make profit from an industry which has already been bled dry by Ofgem?.

There are those who might worry for public safety. The gas network operates at pressures from 30 millibars to pressures in excess of 70 bars and all this,under a street near you,maybe right outside your front door,as some people have found to their cost.

Something as critical as this should be properly maintained to the highest order by skilled,properly rewarded and motivated men. It should not be a vehicle for profit because when this happens,then safety often is the first casualty,followed by members of the public. Railtrack is but one example of this kind of business practice.

The gas network and emergency service in this country should be kept fully integrated,run and owned by one company and properly financed. It should not be threatened by Ofgem in its manic drive to cut costs ,or by a company who's first priority is profit.

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tarquinlinbin
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