Gaz de France says unbundling plan is a "screw up"

By Muriel Boselli and Marie Maitre

PARIS, March 25 (Reuters) - Gaz de France GAZ.PA on Tuesday renewed its opposition to the European Commission's plan to separate energy production from distribution assets, but said it would sell its transport network if forced to.

"We are totally against it, we think it's a complete screw up for our company, a complete screw up for the European networks, but if we are forced to do it, we will," Jean-Francois Cirelli, head of the French state-owned company, told a news briefing.

The EU executive proposed last year that vertically integrated gas and electricity firms separate their production and supply operations from transmission activities to foster competition on the market and bring down prices.

While liberalised markets like Britain have backed steps such as the so-called "unbundling" to increase competition and bring prices down, France and Germany have been staunch opponents.

E.ON EONG.DE, the world's largest utility, agreed last month to divest its German grid to end an EU antitrust investigation, boosting the European Commission and the backers of liberalisation.

But Cirelli insisted unbundling production from transport assets would not bring prices down, nor fuel investments.

He said the European Commission could not use the argument that unbundling would bring prices down as the only way to do so would be to reduce investments in transport infrastructure.

"I'm waiting to see if there will be improved investments. If one day we carry out the unbundling, we will see in five years, in 10 years who actually invested in the networks."