|   **Exhibit 4.16** |
|------------------------------|

 

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| **National Grid Transco** | 1-3 Strand                    | T +44        (0) 20 7004 3000 |
|---------------------------|-------------------------------|-------------------------------|
| London WC2N 5EH           | F +44 (0) 20 7004        3004 |
|                      | www.ngtgroup.com              |

 

| 5th June 2003                                         |                                         |
|-------------------------------------------------------|----------------------------------------------|
|                                                  | Sir John Parker        FREng        Chairman |
|                                                  |                                         |
|                                                  | D: +44 (0) 20        7004 3010               |
| Mr James Ross                                         | F: +44 (0) 20        7004 3012               |
| Olive Hill                                            | M: +44 (0) 7831        496201                |
| Wyck RissingtonNear CheltenhamGloucestershireGL54 2PW | john.parker@ngtgroup.com                     |
|                                                  |                                         |
|                                                  |                                         |
|                                                  |                                         |

| Dear                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| With reference to your letter        of appointment dated 4th March 1999 as amended by the letter        dated 24th October 2001, I am writing to confirm the terms        of your appointment as a Non-Executive Director and Deputy Chairman of        National Grid Transco plc (the "Company") with effect from        1 April 2003. You will also be the senior independent Non-Executive Director        on the Board. It is agreed that this is a contract for services and is    not a contract of employment. |

AppointmentYour appointment, which commenced on 1st March    1999, currently ends at the Company's AGM in 2004, unless otherwise terminated    earlier in accordance with the Company's Articles of Association or by and    at the discretion of either party upon one month's written notice. Continuation    of your contract of appointment is contingent on satisfactory performance    and re­election at forthcoming AGMs. In the unlikely event that shareholders do not support your appointment or other shareholder action terminates your appointment before the 2004 AGM, you will not be entitled to receive damages for breach of contract. As you know, it is Board policy that Non­Executive    Directors are typically expected to serve two three-year terms; any extension    to this is subject to review by the Nominations Committee (prior to making    recommendations to the Board) in the light of good corporate governance policyat the time.

Time CommitmentOverall we anticipate a time commitment of approximately 1 day per week on average taking account reading and preparation time for Board and Committee meetings. This will include attendance at Board meetings (estimated 9 scheduled meetings per annum of which 2-3 per annum will be in the USA) plus ad hoc and emergency meetings, the AGM, any extraordinary general meetings, 2 Board strategy sessions and at least one site visit per year. It is planned that certain Board meetings will be held out of London at the Company's operations (in the UK and USA).

By confirming this appointment, you have agreed that you are able to allocate sufficient time to meet the expectations of your role including appropriate preparation time. The agreement of the Chairman should be sought before

|                                                  | National Grid Transco        plc |
|-------------------------------------------------------|----------------------------------|
| Registered Office: 1-3 Strand,        London WC2N 5EH |
| Registered in England and Wales,        No 4031152    |

 

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accepting additional commitments    that might affect the time you are able to devote to your role as a Non-ExecutiveDirector and Deputy Chairman of the Company.

You should also have regard    to your duties as a director in light of the UK Listing Rules and Combined    Code and obligations arising as a result of the Company's shares being listed    on the New York Stock Exchange, as set out in the relevant section in the    Directors' Information Pack. You will also be subject to the Company's Share    Dealing Code as set out in the Directors Information Pack.

| RoleNon-Executive Directors have the same  general legal responsibilities to the Company as any other director. The Board  as a whole is collectively responsible for promoting the success of the Company  by directing and supervising the Company's affairs. The Board: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •                                                                                                                                                                                                                                                                     | provides effective business leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed; |

| • | sets the Company's strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance; and |
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| • | sets the Company's values and standards andensures that its obligations to its shareholders and others are understood andmet. |
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| In addition to these requirements    of all directors, the role of the non-executive has the following key elements: |
| •                                                                                                               | **Strategy:**Non-Executive Directors should constructively challenge and contribute to the development of strategy; |

| • | **Performance:**Non-Executive Directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; |
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| • | **Risk:**Non-Executive Directors should satisfy themselves that the financial function of the Company is professionally managed and that financial controls and systems of risk management are robust and defensible; and |
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| • | **People:**Non-Executive Directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning. |
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CommitteesThis letter refers to your appointment as a Non-Executive Director and Deputy Chairman of the Company. You have also been requested to serve on the Nominations Committee and be chairman of the Risk and Responsibility Committee.

FeesYou    will be paid an annual fee of £115,000 gross per annum which will be    paid monthly in arrears which includes fees for your chairmanship of the    Risk and Responsibility Committee. You will not receive any additional fees    for membership of, or attendance at, any Board Committee meetings. The Companywill reimburse you for all reasonable and properly documented

 

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expenses you incur in performing    the duties of your office. The Board shall review the above fees from time    to time and they are therefore subject to change. All fees and payments willbe made subject to any deductions required to be made by the Company.

Outside InterestsIt is accepted and acknowledged        that you have business interests other than those of the Company and have        declared any conflicts that are apparent at present. In the event that you        become aware of any potential conflicts of interest, these should be disclosed  to the Chairman and/or Company Secretary as soon as apparent.

The Board of the Company have      determined you to be independent according to the provision of the Combined  Code.

Confidentiality       You will, naturally, during your appointment and following its termination not disclose or communicate to any person (except as required by law or in the course of the proper performance of your duties, or with the consent of the Board of Directors) nor use for your own account or advantage any confidential information relating to the Company or any of its subsidiary or associate companies which you obtained during your appointment or otherwise.

You will be required to return all papers containing confidential information on termination of the appointment.

Your attention is also drawn to the requirements under both legislation and regulation as to the disclosure of price sensitive information. Consequently you should avoid making any statements that might risk a breach of these requirements without prior clearance from the Chairman or Company Secretary.

InductionYou have already been provided with an introduction to the Company and its businesses and detailed information on a variety of areas plus a directors' information pack. We have also arranged for various site visits and meetings with senior and middle management and the Company's advisors. We will also arrange for you to meet major investors as appropriate.

Review ProcessThe performance of individual directors and the whole Board and its Committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role you should discuss them with the Chairman as soon as is appropriate.

InsuranceThe Company has directors' and officers' liability insurance and it is intended to maintain such cover for the full term of your appointment. A summary of the cover is included in your directors' information pack.

 

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Independent Professional AdviceOccasions may arise when you consider that    you need professional advice in the furtherance of your duties as a director.    Circumstances may occur when it will be appropriate for you to seek advice    from independent advisors at the Company's expense. Please advise either    the Chairman or the Company Secretary should you seek such advice. The Company    will reimburse the full cost of expenditure incurred in accordance in respectof such advice.

IndemnityIn the event that you are made aparty or are threatened to be made a. party to any threatened, pending    or completed action, suit or proceeding, whether civil, criminal, administrative    or investigative, by reason of the fact that you are or were a director of    the Company, the Company shall indemnify you against expenses (including    legal fees) actually and reasonably incurred by you in connection with such    action, suit or proceeding and against judgments, fines and amounts paid    in settlement in connection with such action, suit or proceeding to the fullest    extent permitted by the Companies Act 1985 as amended and any other applicable    law or regulation, as from time to time in effect. Such right of indemnificationshall be without prejudice to any other rights to which you may be entitled.

Governing LawThe agreement contained in this letter shall    be governed by, and construed in accordance with, English law and shall besubject to the exclusive jurisdiction of the English courts.

Entire AgreementThis appointment letter represents the entire    understanding, and constitutes the whole agreement, in relation to the Appointment    and supersedes any previous agreement between yourself and the Company withrespect thereto.

On a personal level, I am delighted that    you are continuing to serve on the Board of National Grid Transco plc andI look forward to our continuing working relationship.

Yours sincerely

**Sir John Parker  Chairman**

Agreed and Accepted by

17.6.03

James Ross

 

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