Electricity firm asked to justify increases

PUBLISHED : Tuesday, 28 November, 2000, 12:00am
UPDATED : Tuesday, 28 November, 2000, 12:00am

A proposal by Hongkong Electric to increase its charges has been challenged by officials, who demanded further justification before granting approval.

Secretary for Economic Services Sandra Lee Suk-yee yesterday confirmed the company's annual tariff adjustment report was received a few hours after the media reported the firm was seeking a five per cent rise.

But she said the Government had yet to make a decision. 'There is a series of data that requires more details. It has an impact on how well we assess the overall financial situation [of the company],' she told Legco's economic services panel.

She said the company had said it was under pressure to increase charges, but would not say the percentage sought. The company and the Government will brief lawmakers on the outcome when the panel meets next month.

In September, the company ran a newspaper advertisement saying the basic tariff had been raised by 6.3 cents per unit.

But the tariffs paid by households on Hong Kong Island and Lamma Island had remained unchanged because they were offset by increases in fuel and other rebates.

Sin Chung-kai of the Democratic Party asked whether Hongkong Electric had 'jumped the gun'.

Fellow Democrat Fred Li Wah-ming accused the Government of keeping the legislature in the dark about the increase.

'The rebates fluctuate from time to time. But the basic tariff has crept up by 6.3 cents. This is a tariff increase in disguise,' Mr Li said.

Panel chairman and Liberal Party chief James Tien Pei-chun was also dissatisfied that the legislature had not been consulted.

He said that he only became aware of the increase when the Democrats raised the issue at the panel.

'Those rebates can disappear at any time. You can't say we should not complain since the overall tariff remains unchanged,' Mr Tien said.

Deputy Secretary for Economic Services Maria Kwan Sik-ning denied that the rise was clandestine. 'The most important thing is that households do not pay more as a result,' Ms Kwan said.

She said that the company would not be making more profit than allowed under a scheme controlling the investment and returns.