§ Mr. David ShawTo ask the Secretary of State for Northern Ireland when he expects to complete the sale of Northern Ireland Electricity power stations.
§ Mr. BrookeI have now reached contractual agreement for the sale of Ballylumford power station to British Gas, the sale of Kilroot and Belfast West power stations to a consortium of Applied Energy Services and Tractebel and the sale of Coolkeeragh power station to a management-employee team—MEBO.
The contracts provide for total sale proceeds of £353 million subject to the normal audit of completion accounts; £132.4 million for Ballylumford, £214 million for Belfast West and Kilroot and £6.5 million for Coolkeeragh. In the later case, a five-year profit-sharing deal offers the possibility of up to a further £2 million. The terms of the sales and the relevant documents have been notified to the European Commission.
The companies which are being sold will be created out of the single entity of Northern Ireland Electricity at 1 April 1992 and have no separate trading records. Because of this, provisions are being included to allow for further adjustments to the sale price, if necessary, for a 15-month period until after the first year's trading has been completed and audited. These provisions mostly relate to assurances given by Government as to station liabilities and information made available and are subject to rigorous de minimus levels and caps of £26 million for British Gas, £53.5 million for AES/Tractebel and £0.5 million for the management buy-out.
Completion of each of the sales is subject to a number of conditions mainly in relation to satisfying terms for financing. The sales to MEBO and AES/Tractebel are project financed and will not be completed until the money is in place. While I am hopeful that this can be achieved by 31 March, I cannot guarantee that this will be so. An important provision in the contracts allows a period before completion during which the new owners can familiarise themselves with the operation of the stations.
The sale of Ballylumford brings with it plans for the construction by British Gas of a gas pipeline to Northern Ireland and the conversion of that station to gas firing and 1 am pleased to announce that the European Commission has approved a grant of up to 90 million ecu towards these costs. Terms have been agreed, but British Gas has still to carry out a detailed undersea survey and complete negotiations with Bord Gáis Éireann in respect of the shared onshore pipeline in Scotland. The agreement allows for a reassessment of the gas pipeline proposals following completion of these. The pipeline has been sized so that it it can accommodate additional gas requirements for either future power generation or the development of a downstream market in Northern Ireland and I welcome the opportunities which these will present.
I am convinced that the sale of power stations on the terms which I have agreed represents the best outcome for 233W not only the taxpayer but energy users in Northern Ireland. A privatised industry represents the best means of securing maximum efficiency and will be more responsive to the needs of consumers. The provision of gas will give us not only access to a clean and cost effective fuel for electricity generation but the promise of an additional alternative fuel for industrial, commercial and domestic consumers in Northern Ireland in the years ahead.