Officials were negligent in approving construction of a power plant, resulting in higher bills for consumers, according to Legco's Public Accounts Committee.
The decision is the preliminary finding of an inquiry by the committee into claims by the Audit Commission that CLP Power, formerly China Light & Power, had overcharged consumers by $3.4 billion as a result of surplus power capacity.
The committee will now consider whether to single out Chief Secretary for Administration Anson Chan Fang On-sang, who as secretary for economic services was responsible for power when the plant was approved, for criticism.
She has been accused by some legislators of misleading the Executive Council into approving the Black Point power station in 1992.
It is understood the first draft of the committee's report says members expressed 'serious dismay' and 'strong dissatisfaction' about the decision.
The Audit Commission found that the company had overestimated demand for electricity and the plant should not have been built.