Malaysians circling British utilities

WESSEX Water chief Colin Skellett and his Malaysian tycoon friends are eyeing British utilities. Wessex fell to Malaysian conglomerate YTL in a £1.2bn takeover that sank Skellett into controversy with false allegations of a £1m 'backhander'.

Now the Wessex Water chief executive says YTL is keen to increase its investments in the UK. 'They are very much here for the long term,' he said. 'They like the UK and they are after more regulated assets.

'The local gas networks are being put up for sale by Transco. The remaining quoted water companies are weak and trading below their asset values because we are all suffering from the last Ofwat review which cut prices 12%. If the next review is as tight, water companies will be less attractive to equity players with a more short-term agenda.'

Skellett also acts as a consultant for YTL, which bid for Midlands Electricity, but says: 'That is nothing to do with Wessex Water.'

YTL bought Bath-based Wessex after the collapse of Enron which, says Skellett, 'vastly overpaid' when buying the group for £1.8bn in 1998. Enron paid 1.6 times asset value, YTL 0.95 times. Staff numbers have risen 25% to 1,800 under YTL as it takes more contracting work in-house.

Last February, Skellett was cleared of all wrongdoing following claims that he had accepted a massive bribe. The allegations had led to his arrest and a police raid on his home last August.

Skellett says now: 'l am philosophical. I am not regretful that l didn't sue for all the trouble. l understand the police had a difficult job to do. It is in the past and done. l am philosophically opposed to people suing public bodies. The only people who benefit are lawyers.'

National Grid Transco has appointed investment banks Rothschild and Morgan Stanley to advise it on the possible sale of some gas pipe networks.