ºÃÉ«ÏÈÉúTV

Procurement policy
The company uses a mixture of competitive tendering and framework agreements in its procurement of construction services and the choice of which to use will depend on the project or type of equipment being purchased.

Current and future projects
Scottish and Southern Energy's capital programme fell in 2001/02, due mainly to the completion of its Peterhead and Seabank 2 projects, and this trend has continued into the first half of 2002/03. In this period, to September 2002, the group's capital expenditure, excluding the gas storage business, totalled £114.7m, compared with £137.8m in the same period last year.

The is investing £450m in renewable generation, and in 2002/03 work will start at its Shin, Mossford, Grudie Bridge, Quoich and Finlarig hydro power stations. Scottish and Southern Energy plans to expand its renewable power generating capacity, which includes refurbishing its hydroelectric plants as well as building new ones, and the development of wind farms.

In early 2002, the company awarded a £14m contract to GE Hydro UK for the refurbishment of its hydro power station at Invergarry and, in September 2002, Alstom Power Hydro won an £18m deal for a hydro power station at Muir of Ord. Smaller refurbishment contracts have been let for hydroelectric power stations at Fort William and Pitlochry.

Planning has started on the development of large wind farms, as it has been estimated that about 75% of the renewable energy needed to meet the government's 10% target will come from this form of power generation.

Essential information
Scottish and Southern Energy generates and distributes electricity, supplies gas, has one of the UK's biggest electrical contracting businesses, SSE Contracting Group, and, through SSE Telecom, manages one of the largest private telecoms network.

The company produces about 10% of the UK's electricity, for example at Keadby, Seabank and Peterhead, and sells electricity through its Scottish Electric, SWALEC and Southern Electric companies. To help fund its programme, the group issued a £250m, 30-year bond at a 5.5% interest rate in December 2001.

As well as suffering like other firms from falling revenue from electricity sales, Scottish and Southern Energy is reported to have said it could to lose up to £175m of post-tax profit from contracts to sell electricity to TXU Europe. With this company in administration, these contracts would now be at risk.