HONG KONG utility companies are heading for 'chaos' before the end of the century as market pressures and deregulation transform the industry, predicts Andersen Consulting. The continual advance of technology, coupled with growing demands from customers for higher levels of service, will inevitably force a radical restructuring of the region's utilities, said George Hill, worldwide managing partner for the firm's utilities consulting. Chaos would prevail during the initial phase of this transformation because a deregulated market would mean customers could freely choose which utility company they wanted to subscribe to based on price and quality of service. 'If you don't believe all this stuff, then you believe as a company, that tomorrow will be just like today. You do business as usual and hope the world doesn't come in around you,' Mr Hill said. 'If you believe technology will develop and regulations will disappear, then you believe we're moving into a chaos scenario.' He predicted that an 'energy services market' would emerge, in which energy was bought and sold like a telephone service. In the future, electricity could become part of a package of services, including credit cards, interactive phone services and cost-efficient billing methods. 'The only thing stopping this is the laws, and they will be impacted by customers screaming for better services and lower prices,' said Bradford Holcombe, an industry consultant who co-ordinates client business strategies for Andersen. Currently, Hong Kong has two electric companies, China Light and Power and Hong Kong Electric, which are regulated under the government's schemes of control. 'Hong Kong and Taiwan are only footsteps behind the United Kingdom and Japan. Supply is sufficient, therefore service becomes important,' said Stephen Snyder, director of utility industry consulting for Andersen in Greater China. 'In China, the focus is to get to the point where supply is not an issue,' he said. But he admitted that it would be years before China even reached this stage.
