Updated on Apr 05, 2008 – SCMP
I see it is business as usual for CLP Power under the revised scheme of control agreement for electricity companies (“CLP places LNG plant on shopping list”, March 31).
Under the previous arrangement, CLP Power was able to generate extra income for shareholders (mainly Exxon) of HK$3.2 billion to HK3.6 billion per annum from capital spending of HK$23.8 billion over the past five years, at the permitted rate of return of 13.5 per cent to 15 per cent per annum. Barely is the ink dry on the new agreement and CLP Power wants to bump that spending up to HK$38 billion, to generate HK$3.7 billion per annum extra income under the next “five-year plan”.
This extra spending is needed to “compensate” for the miserly rate of return of 9.99 per cent now imposed upon it by a heartless administration.
If allowed, this money would come straight out of hard-pressed Hong Kong consumers’ pockets. But what is it all for? In addition to the deeply unpopular and unnecessary liquefied natural gas plant on South Soko Island, we can no doubt look forward to endless roadworks up and down the length of Lantau and the New Territories, upgrading the transmission lines to “super class”.
Only a passing mention was given to the long overdue installation of 1980s technology, finally, to reduce emissions from the notorious coal-fired generating plant at Castle Peak (Hong Kong’s single largest polluter), and none at all to energy conservation measures. At the moment, the more you burn, the less you pay.
Profligate corporate users have no need to economise, and all the incentives are to keep CLP Power generating more electricity, further increasing our carbon footprint, along with its executive remuneration packages.
Padding of budget submissions is an old bureaucratic trick, of course, and, by now, our energy officials at the Environmental Protection Department will be well used to these ruses.
It is to be hoped that the department will take an axe to CLP Power’s more extravagant capital expenditure proposals. The LNG plant is top of the list for the chop, in my view.
John Schofield, Lantau