Hongkong Electric will have to provide more concessions to the needy if it wants to impose a tariff rise for a second consecutive year, a government source hinted yesterday.
But officials have ruled out immediate changes to an agreement dictating profit levels for electricity firms on the eve of a Legco debate on the issue.
Democratic Party legislator Fred Li Wah-ming will introduce a party motion tomorrow urging the Government to lower the profit levels allowed for Hongkong Electric and CLP Power when an interim review falls due next year.
The motion will also call for market liberalisation in the energy sector in 2008 when the Scheme of Control agreement - which caps annual profits of the two utility companies at 15 per cent of the value of their fixed assets - expires. In addition, the motion says Hongkong Electric should try to buy excess electricity from CLP Power to avoid the need to build new power stations when it reaches capacity.
Such a move would require the establishment of interconnection between the two networks by new underwater cables.
'The two utility companies are making healthy profits in this economic downturn. They should be made to share more with the people,' Mr Li said.
A government source said yesterday that officials were keeping an open mind on the interim review of the agreement. However, any changes to the agreement would require consent from both firms, the source said. As listed companies, there was an obligation to make profits for their shareholders, he added.