Aiming to win a nuclear bet

THE MONDAY INTERVIEW DR ROBIN JEFFREY

The chief executive of any company that has just doubled its profits and, over the past five years, transformed a £33m loss into a £150m profit, ought to be feeling quietly optimistic about the future. But although Scottish Nuclear has just turned in precisely that startling performance, its chief executive, Dr Robin Jeffrey, is fighting desperately to save his company, one of the top 20 in Scotland, from a hostile takeover by what many Scots would regard as "the enemy Sassenach".

No announcement on the privatisation of the nuclear industry will be made until after the local Government elections. But rumour is that the Government believes it will get more money if it bundles Scottish Nuclear and its English counterpart, Nuclear Electric, into one package.

Now, less than a week after reporting a doubling of the company's profits over last year, its bright modern offices at East Kilbride, just outside Glasgow, have become the command centre for the battle to preserve its independence. Dr Jeffrey said: "My vision has to be the successful privatisation of Scottish Nuclear as an independent company."

The company's two advanced gas-cooled reactors (AGRs) at Torness, Lothian, and Hunterston, Ayrshire, are now generating electricity for 2.2 pence a unit. Five years ago, the unit generating cost was 3.3 pence.

"That is real business achievement," Dr Jeffrey said. "There has been a change in the perception of Scottish Nuclear. We have managed to transform the way in which people look at the nuclear industry and have injected openness and credibility."

The creation of Scottish Nuclear out of the ruins of thebotched electricity privatisation injected a new diversity of thinking into the previously monolithic nuclear industry. Under the chairmanship of James Hann (an outsider, brought in from the oil industry), Scottish Nuclear took up the cause of long-term storage of spent fuel, rather than reprocessing.

After Dr Jeffrey joined in March 1992, the two men have argued a variety of causes, some of them unpalatable to their Government shareholder. They have ranged from advocating an explicit energy strategy for the UK through the need for security and diversity of supply in the electricity industry, to the assessment of the company by the Centre for the Study of Financial Innovation for an "environmental risk rating". If Scottish Nuclear is absorbed by its English rival, then this different perspective will be snuffed out. Although the company has now abandoned the storage of spent fuel, it argues that by pursuing the alternatives it forced British Nuclear Fuels to rewrite its offer for reprocessing Scottish Nuclear's fuel. And Dr Jeffrey stressed that a significant component of the deal signed at the end of March is actually long-term surface storage, the first time BNFL has offered such a service to its customers.

But these are ungrateful times. Turning round the company and doubling profits in the past year are history. What of the future? If Scottish Nuclear is allowed to keep the independence to pursue its own business, Dr Jeffrey's first priority is achieving a generating cost of 2p per unit by 1998.

Then there is diversification: in December 1994 a subsidiary, Scottish Nuclear International, was created to handle overseas business, mainly in eastern Europe. "I'd like to develop a portfolio of renewable energy projects," he added. The company completed trials with a prototype tidal generator in Loch Awe last year.

But while Scottish Nuclear remains in the public sector, it is constrained to operate a nuclear business in Scotland. As the former chief engineer of the old South of Scotland Electricity Board, Dr Jeffrey has experience of other generating technologies and he believes that "a broader portfolio of generation would be good for the company. It makes sense to develop into a mixed generation company." Scottish Nuclear could add, perhaps, combined-cycle gas turbine plants to its nuclear generating capacity.

Within Scotland? "Within the UK".

Despite eyeing the opportunities south of the border, the Scottish dimension looms large both in the company and the man. Scottish Nuclear employs some 1,750 staff, many of them highly qualified engineers. The inevitable job losses following a mrger would hit the Scottish economy. Conservative as well as Labour MPs north of the border have joined trade unionists and businessmen in condemning the projected merger.

Senior management appear physically to personify their respective companies. The chairman of Nuclear Electric, John Collier, is a big man, tall and very broad; his chief executive Dr Bob Hawley is also a tall man with the proverbial lean and hungry look. Dr Jeffrey, in contrast, appears almost slight but quick and intense in manner. It is no surprise to learn that at the age of 55 he still lists squash among his recreations. It is a hard game and, like anyone who drives a corporate culture, Dr Jeffrey plays to win.

His wider ambitions hark back to the era when Scots engineers like Telford appeared to dominate the world of technology. But Dr Jeffrey is a very modern Scots engineer.

David Harrison, former vice-chancellor of Exeter University, is now Master of Selwyn College, Cambridge - and as chairman of the advisory committee on nuclear plant safety is one of Scottish Nuclear's overseers. He was on the staff of the chemical engineering department at Cambridge and still remembers the academic excellence of Robin Jeffrey's Ph.D awarded in 1964 for fluid mechanics.

"But I spent most of my time playing squash, badminton and tennis at Cambridge," was Dr Jeffrey's response. He first met his wife on the badminton court at Cambridge, and the family seems to be a collection of achievers.

Mrs Jeffrey, an Oxford physicist, used to translate scientific texts from Russian and German into English and is currently doing a PhD in politics at Glasgow University. One son already has a PhD and lectures in computer science at Sussex University; the second is doing research for a PhD in aerodynamics while their daughter, after an Oxford degree in engineering economics, is now working in the City. All the children went to their local secondary school - "an example of the quality of Scottish state education."

Whether Dr Jeffrey will win his fight to preserve his company's independence will not be known for a couple of weeks. But one incident at a recent Scotland vs Wales rugby match may hold a clue. Dr Jeffrey invited his opposite number, Dr Bob Hawley, along to watch. Both men bet that Scotland would win (it did) but, Dr Jeffrey recalled, "I won a fiver off Bob Hawley, because I bet that Scotland would win by a margin of 10 points or more." It remains to be seen who will win the bigger bet.