Lai See
PUBLISHED : Saturday, 12 July, 2014, 12:32am
UPDATED : Saturday, 12 July, 2014, 12:32am

Power squeeze

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.
 

We were interested to read in CLP Holdings' in-house magazine an account of the farewell banquet the company held to mark the end of its long-standing partnership with ExxonMobil. The account concluded: "CLP sincerely wishes ExxonMobil continued success for the future."

This left us wondering that the boot should be on the other foot. It is CLP which is facing a rather more uncertain future. The government is showing all the signs of trying to shoehorn it into a deal with the mainland to import electricity. The company suffered the same indignity some years ago when the previous administration without any warning announced a gas deal with the mainland which meant that rather than having the option of buying gas at world market prices, CLP would have to buy from PetroChina. The threat of introducing third parties to the duopoly that controls the power market is an old government ploy.

The government uses this option to ratchet down the rate of return that the power companies earn via the scheme of control. This stands at 9.99 per cent on generation that uses traditional fuel sources such as coal and gas, and 11 per cent on renewable sources such as wind. Under the scheme of control that expired in 2008, the permitted rate of return on its depreciated net assets was between 13.5 per cent and 15 per cent, which at the time was twice the rate of markets such as Britain and Australia. This made Hong Kong one of the most lucrative energy markets.

Governments have been reluctant to be seen acquiescing in the additional costs to consumers of using more gas and less polluting coal. The government no doubt senses the prospect of a rare political victory in forcing the power companies to lower their rates.

 

Performance switches to the fast lane at transport office

Over the years we have on occasions been critical of government departments. So it is with no little pleasure that we are happy to bestow praise where it is due.

Some years ago the prospect of renewing a vehicle licence triggered the onset of instant gloom.

The process could take up to two hours of waiting around in the offices of the Transport Department.

However, over the past couple of years the efficiency with which this task can now be accomplished at the Kwun Tong office brings tears to the eyes. There is a performance target on the wall stating that the waiting time to renew a licence should be no longer than 40 minutes.

The task yesterday took 20 minutes. So well done that department.

Whoever is in charge of that operation should immediately be moved to dealing with applications for outside seating accommodation for restaurants and bars, a process that currently takes between seven months and two years.

 

Message put through the blender

We wish Cathay Pacific Airways good luck with its new "global digital agency of record" - DigitasLBi - which has just been appointed after a competitive pitch. The role is essentially to upgrade the ways in which Cathay communicates, but this news is communicated to us in gobbledygook.

DigitasLBi will be tasked with overhauling Cathay's "global digital strategy, as well as relaunching its multi-platform e-commerce offering".

Laurent Ezekiel, client services director with DigitasLBi, told the website Marketing: "We're thrilled to be building

a blended, international team that will work with Cathay Pacific."

Cathay's digital retail manager Catherine Hornby joined in the digibabble saying that DigitasLBi "will be invaluable in helping us to reimagine our digital customer proposition".

Quite so.

 

Have you got any stories that Lai See should know about? E-mail them to howard.winn@scmp.com

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