22.
23.
24.
- 11
S
Mr. Poon pointed out that as the nuclear power station would supply Hong Kong, the parameters used in the economic calculations should be compared with those prevalent in Hong Kong. The taxation used in the study was considered high by international standards and even more so compared with that in Hong Kong (maximum 17%). He suggested that a profit tax of 20% be considered. Mr. Chen responded that whilst a profit tax of 20% could be considered, the project should be considered as a whole. All
should be parameters
considered
make
electricity generated by the nuclear competitive. The tax rate would eventually be determined by the Chinese Government. Should the rate be too high for the project to be viable, KEC would reflect the situation to the Government. If PRC found it difficult to adjust the tax rate,
SO that CLP's KEC would try to compensate CLP in other areas overall profitability was assured.
to
the
power station
25
Mr. Stones requested Mr. at period of
years depreciation period of 20
Chen to comment on the depreciation
Mr. Chen stated
was reasonable. years
4%
that
a
Mr.
-
p.a. 25
of
the prevailing high rate
Stones suggested that it was advantageous to borrow loans for
long possible in
of
as
inflation.
view
The method
the labour
for cost of evaluating construction nuclear power station was discussed. Mr. Chen commented that the method of assessing labour cost by taking account of wages and welfare was complicated and suggested that an arbitrary It rate which would benefit both CLP and KEC should be used.
agreed was
that the matter be considered further by the Economics Subcommittee and results be prepared for discussion by the Management Group.
25.
Mr.
Chen
requested
CLP to
provide information
on
the
calculation of generation cost in CLP for years 1988 onwards. CLP agreed.
Cont'd
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