TNAG-0767-FCO40-971-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 5

Negotiations are taking place with HEC regarding the introduction of a profit control scheme for the Company, to take effect from 1st January 1979.

The Proposed New Site

13

As regards the location of HEC's proposed new site, the Company said that sites at Tai Tam, Ap Lei Chau or Lamma Island would meet its requirements. The Government is strongly opposed to:

(a)

Tai Tam - because it has recently been designated as a country park and is not acceptable on environmental grounds;

(b)

Ap Lei Chau

(i)

(ii)

because :

It is much nearer a crowded urban area than a power station should be; even at present with only 60% of its committed capacity in operation, it can cause excessive short-term high concentrations of sulphur- dioxide and acid smuts. The committed increase in capacity is itself undesirable; and any addition representing a further 50% of the committed capacity would be unacceptable.

The 13-acre site is badly needed to provide industrial employment in Aberdeen, which is very short of industrial land, and in which there are no further areas in which such land can be produced.

14

This therefore leaves Lamma Island, and two possible sites there have been identified. They are shown in the plan at Annex C. Both these sites are on the northern part of the island. Site 'A' would not conflict with the recreational use of the island. Site 'B' would totally eliminate use of a very popular bathing and recreational area and is therefore not recommended. The site at Po Lo Tsui (Site 'A') is therefore proposed. There would be few clearance problems (and therefore little disruption to village life) and it is believed the environmental implications of siting a power station there would be minimal.

CONFIDENTIAL