TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 8

fuel delivery and no dredging of the marine access will be necessary. However, it is expected that larger vessels, up to 100, 000 dwt colliers, would have to be used after 1984 when more power genera- tion sets are commissioned. Dredging of the Urmston Road above the 10-fathom line would be required to bring in these larger vessels. It is proposed that the costs involved in the initial dredging operation should be borne by the Company in line with the normal practice involving dredging to provide adequate and safe marine access to specific sites.

Interconnection with Hong Kong Electric Company

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Honourable Members will have considered memorandum XCC(78)73 on the proposed grant to the Hong Kong Electric Company of a power station site on Lamma Island. The grant of a new site to each company would mean that in negotiating an arrangement for an interconnection between them, the companies would be on more or less equal terms. If the Hong Kong Electric Company is not granted a new site (and Kowloon Electricity Supply Company Limited is), the Hong Kong Electric Company's position would be considerably weakened and the chances of achieving a prompt and satisfactory agreement between the companies would be diminished. In that event the Government proposes to inform the Kowloon Electricity Supply Company Limited that while the Tap Shek Kok site has been granted to it, it is the Government's desire that the Kowloon Electricity Supply Company Limited should conclude an agreement with the Hong Kong Electric Company for an inter- connection between the two companies, to the satisfaction of the Government, within a specified period of time.

Public Relations

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The announcement of the grant of the Tap Shek Kok site will no doubt renew pressure to be put to bear on the Government to disclose further details concerning the strategy proposed for future power generation. It is proposed that a joint statement should be made covering both the Hong Kong Electric Company Limited's application and the private treaty grant to be made to the Kowloon Electricity Supply Company Limited.

Advice Sought

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Honourable Members will be asked to advise whether a private treaty grant on the basis of the basic terms described in paragraph 18 should be made to the Kowloon Electricity Company Limited.

CONFIDENTIAL ##

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