XN000022-1995-05-17 — Page 62

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CLP's customer-owned development fund

Following is a question by the Hon Christine Loh Kung-wai and a written reply by the Secretary for Economic Services, Mr Gordon Siu, in the Legislative Council today (Wednesday):

Question

It is learnt that the China Light and Power Co. Ltd. (CLP) could not meet its guaranteed rate of return through electricity sales last year and has therefore withdrawn over $1.2 billion from the customer-owned Development Fund as permitted by the Scheme of Control. In this connection, will the Administration inform this Council of:

(a)

the estimated amount of funds that CLP will withdraw annually from the Development Fund over the next five years;

CLP's annual net assets forecast over the next five years;

(b)

(c)

the projected annual permitted return over the next five years; and

(d)

the projected annual amount of kWh sold locally over the next five years?

Reply:

The Development Fund of the China Light & Power Company, Limited (CLP) was drawn down by $903 million during the financial year ended 30 September 1994. Part of the draw-down as returned to consumers through a special tariff rebate of 3? per unit from 1 March to 30 September 1994. The remainder was transferred to the profit and loss account in accordance with the terms of the Scheme of Control Agreement (SCA).

The provisions governing the Development Fund in the Government's SCAS with the power companies state if the actual return earned by the companies, after the required deductions, is above or below the level of return to which they are entitled under the terms of their SCA, any excess shall be credited to the Development Fund and any shortfall deducted from it. The primary purpose of the Development Fund is to assist in the acquisition of fixed assets. The level of the Fund during the period covered by a Financing Review is subject to approval by the Executive Council.