British Gas in shake-up plan

FURTHER details of contingency plans for a radical restructuring of British Gas emerged this weekend. Under proposals drafted by an internal working party called the Business Issues Group, BG would slash its regional presence and seek to minimise activities falling under regulatory control.

The contingency plans include axing eight of the company's 12 regions, selling off 350 of the 650 British Gas showrooms, and removing many layers of management.

In line with its earlier commitment to the Office of Fair Trading, BG would run its transportation and storage business as an arms-length operation. However, it would set up only one gas trading unit to cover both its industrial and domestic customers, rather than the two proposed in its original submission to the Monopolies Commission.

Under the contingency plans, BG would also minimise activities falling within the sphere of Ofgas, the industry regulator. It is already developing its global gas division, with projects such as the joint venture with Agip, the state-run Italian gas company, in Kazakhstan.