London (Platts)--13Jan2004

Jersey Electricity has made a preliminary approach to its fellow Channel Islands utility Jersey New Waterworks about acquiring the issued share capital of the latter, it said Tuesday.

Jersey Electricity believes such a deal would provide the Channel island's water industry with greater financial strength to safeguard the future availability, quality and affordability of water supplies, and ensure that ownership of the water industry remains in local hands.

"The water industry in Jersey, as elsewhere, is facing substantial investment costs to tackle the threats of water shortages caused by increasing demand and changing rainfall patterns, legislation on water purity, ageing water distribution infrastructure, and environmental constraints on the development of new water sources," the power company's managing director Mike Liston said.

Jersey Electricity has invested GBP100-mil ($184.5-mil) in its grid system in the past ten years.