XN000022-1980-12-17 — Page 13

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WEDNESDAY, DECEMBER 17, 1980

THE ESCALATION IN CONSTRUCTION COSTS, COUPLED WITH THE EXTRA COSTS INCURRED DUE TO THE DELAYS AT YUEN LONG, HAS NECESSITATED THE CORPORATION TO INCREASE THE LAND PREMIUM TO $700 PER SQUARE METRE AS FROM JULY 1 THIS YEAR, AN INCREASE OF 18 PER CENT OVER THE PREVIOUS RATE FIXED IN DECEMBER 1978.

+IN RELATION TO CURRENT LAND PRICES IN HONG KONG, INCREASED PREMIUM IS NOT EXCESSIVE.

THIS

+HOWEVER, THE EFFECTS OF CONTINUING INFLATION AND POTENTIALLY HIGHER COSTS AT YUEN LONG WILL UNDOUBTEDLY HAVE TO BE REFLECTED BY APPROPRIATE FUTURE INCREASES IN THE PREMIUM.

+THE PLANNED EXTENSION OF THE ESTATE AT TAI PO BY FURTHER RECLAMATION TO FORM A THIRD STAGE WILL PARTIALLY COMPENSATE FOR THE DELAY EXPERIENCED AT YUEN LONG, BUT THE ESTIMATED COST OF FORMING THE ADDITIONAL 20 HECTARES WILL AGAIN MAKE FURTHER INCREASES IN THE LAND PREMIUM INEVITABLE, MR LI ADDED.

CRITERIA FOR INCREASES IN PUBLIC UTILITY CHARGES

******

THE GOVERNMENT HAD APPLIED ITS CRITERIA FOR ASSESSING INCREASES IN PUBLIC UTILITY CHARGES TO THE TARIFF INCREASES RECENTLY ANNOUNCED BY THE TWO POWER COMPANIES, THE ACTING SECRETARY FOR ECONOMIC SERVICES, THE HON PIERS JACOBS SAID TODAY.

THE GOVERNMENT TOOK INTO CONSIDERATION THE EFFECT OF THE INCREASES ON INDUSTRY, ALTHOUGH FOR MOST COMPANIES, POWER CHARGES FORM ONLY A SMALL PART OF THEIR PRODUCTION COSTS, HE SAID IN REPLY TO A QUESTION IN THE LEGISLATIVE COUNCIL BY THE HON FRANCIS TIEN.

THE CONCERN OF THE GOVERNMENT AND OF THE POWER COMPANIES TO MINIMISE THE EFFECT ON INDUSTRY OF INCREASED POWER CHARGES IS EVIDENCED BY THE ESTABLISHMENT, BY BOTH COMPANIES, OF DEPARTMENTS WHICH WILL ADVISE LARGE CONSUMERS, FREE OF CHARGE, AS TO HOW THEY CAN REDUCE THEIR ENERGY COSTS, MR JACOBS SAID.

THE CRITERIA, WHICH ARE INTERRELATED, ARE:

* THE PUBLIC SHOULD GET, AS FAR AS IS PRACTICABLE, THE BEST POSSIBLE SERVICE AT THE LOWEST POSSIBLE PRICE,

* TARIFFS, TOGETHER WITH CONTRIBUTIONS FROM SHAREHOLDERS,

MUST BE SUCH AS TO ENABLE THE UTILITY COMPANY TO REMAIN FINANCIALLY VIABLE, THUS ENSURING THE COMPANY'S ABILITY TO CONTINUE TO MEET DEMAND IN THE FUTURE.

*

THE PUBLIC UTILITY COMPANY SHOULD NOT MAKE EXCESSIVE PROFITS.

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