TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 71

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XCS(77)2

Tariff increases (including fuel escolation) are unlikely to have to be higher than 4% a year, and they may well be less if the assumptions behind the projections turn out to be pessimistic. This 4% would include going to consumers for capital financing, as a last resort. Both an increase of this magnitude and the use of consumers funds should be acceptable to the public provided that:

(a) they are presented well in advance by means of a carefully prepared publicity programme; and

(b)

consumers have some say in the running of the company and a return on their investment on the lines suggested in paragraph 36 above.

Advice

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Honourable Members are invited to advise whether:

(a) the Government side should work to the brief

summarised in paragraph 45 in negotiations with CLP on a new Scheme of Control;

(b) simultaneous negotiations should be opened with HKE

on a Scheme of Control (paragraph 50).

(The Secretary for Economic Services (Mr D. G. JEAFFRES ON), Principal Assistant Secretary (Economic Services) (Mr D. STANTON) and Senior Treasury Accountant (Economic Services) (Mr C. SANKEY)

will attend before the Council for the discussion of this item).

6th April 1977

(CR 4/4576/75)

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