TNAG-0638-FCO40-786-Supplies-of-electricity-for-Hong-Kong-1977 — Page 132

B.

4.

2

-

The results of each Financing Review will be put to the Executive Council for agreement to the projected tariff levels and extent of Development Fund financing for the period referred to in 2. above. Once such agreement has been obtained further consultation with the Executive Council will be necessary only when

a) there is another Financing Review; or

b)

a request arises under B2.b) below.

Auditing Reviews.

1.

An Auditing Review will be conducted jointly by the Government and the Companies annually in November/December when all necessary documents are available, for the following purposes:

a)

b)

2. a)

3.

b)

c)

comparison of actual results of the preceding year with corresponding estimates made at the last preceding Financing or Auditing Review, whichever has occurred later;

consequent revision of items 3.a), b), f) and g) in respect of the then current and the following years covered by the last preceding Financing Review.

If the projected average tariff rate for the then current year ("the updated current tariff rate") is not higher than

i) 0.8 cent per kWh above the average tariff level

most recently approved for that year by Executive Council;

ii)

or

a level likely to result in the Companies' combined cash and bank balance exceeding, at the end of that year, the gross tariff revenues of China Light for the last two months of the preceding year

then, subject to 3. below, tariff adjustment calculations will be made in accordance with the revised figures as stated in 1.b) above, no further Executive Council approval being necessary.

If the updated current tariff rate exceeds either of the limits stated in 2.a) above but does not exceed the limit stated in 2. a)i) above by more than 0.8 cent per kWh, Executive Council's approval of the updated plan will be required but no Financing Review will be necessary.

If the updated current tariff rate exceeds the limit stated in 2.a)i) above by more than 0.8 cent per kWh

a further Financing Review will be held.

In the event of the Government and the Companies failing to agree on the revision stated in l.b) above, or of Executive Council's approval being required in accordance with 2.b) or 2.c) above, tariffs as from the following 1st February will be adjusted on an interim basis in such a way that the limit stated in 2.a)i) above will not be exceeded.

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