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Chris Davis

RESIDENTS and business operators applaud the efficiency and convenience of Hong Kong's power, gas, water and telecommunications systems.

Utility services are taken for granted as we go about our daily lives.

Across Hong Kong, utility companies keep the lights shining, the taps flowing, the gas burning and the telecommunications channels open, providing safety and comfort, and a link to almost anywhere in the world.

And while most do not give a second thought about how clean, fresh water arrives at the tap, flicking on a switch to turn on a television, picking up a phone to talk to friends or lighting the gas to fire up a wok, these are essential services which enhance the quality of life.

Hong Kong utility companies pride themselves on being able to deliver reliable, high-quality services around the clock, mainly out of sight and out of mind.

Utility services have developed in line with demand, prosperity and necessity.

Hong Kong's oldest utility service, China Gas Company, now Hong Kong and China Gas (Towngas), was founded in 1861 and for more than 140 years has played an important role in Hong Kong's economic development and the livelihood of the people.

Other utility companies - the Hongkong Electric Company founded in 1889, China Light and Power (now CLP Power Hong Kong) established in 1903 - have also played a pivotal role in the city's economic and social development.

The first public telephone service was introduced in 1882 by Oriental Telephone and Electric Company, which later became the China and Japan Telephone company.

Lam Pun-lee, associate professor of finance at Polytechnic University,  said the public had benefited from the successful deregulation of the telecoms industry in Hong Kong in recent years, as charges for mobile and international calls had declined.

With the wider use of the internet and introduction of wireless  networks, consumers would enjoy more choices and lower charges for local services.

In addition to liberalising the telecoms industry, the government had removed the scheme of control on bus companies and introduced franchise bidding for bus and ferry services.

'We also see there is increasing competition among different modes of transport in Hong Kong,' Professor Lam said.

'The recent privatisation of the MTR will undoubtedly further increase competition between train and bus services.'

However, the government is hesitant about introducing reforms when it comes to the energy and water industries.

The electricity supply industry in Hong Kong is regulated by the Scheme of Control introduced in 1964.

Under this scheme,  the power firms are subject to rate-of-return control and price control. The aim of the scheme is to ensure the consumer is provided with adequate services at reasonable prices, and provide the company with a 'fair' rate of return.

At present, the gas market is dominated by Towngas and is not subject to government control on prices and returns because the government believes a choice of substitutes, such as electricity and bottled or piped liquefied petroleum gas, are available to consumers.

In 1998, the government came out in support of the introduction of a common carrier system for natural gas, with the objective of increasing competition in the industry.

From its high saturation broadband coverage to its reliable power supply, Hong Kong's utility infrastructure is recognised as being among the best in the world.

The one utility still owned and operated by the government is water.

Privatisation of the water supply was considered, along with all other utilities, during the early days of colonial rule.

But because the financial prospects of such  a move did not look promising to the private sector due to a lack of water, the government was forced to set up the Water Supplies Department (WSD) in the 1850s and borrow money from banks to build the territory's first water supply system.

The problems of obtaining enough fresh water have been around for a long time. Before the completion of a scheme in the 1960s to deliver raw water from the Dongjiang, Hong Kong regularly suffered from chronic water shortages.

The project was followed by several system expansions and the shortage has been resolved. This has brought about the problem of cross-border water-quality protection, highlighting the fact that the water supply is interwoven with economic development, environmental protection and water resources management in the Dongjiang basin.

Last year, a peak daily consumption of 2.91 million cubic metres was recorded on July 14, compared with the 2002 peak of 2.83 million cubic metres.

While Hong Kong's water situation has ebbed and flowed, its telecoms infrastructure ranks among the most technically advanced in the world.

The fixed-line telephone network is completely digitised. There are four companies operating telephone services: PCCW HKT, Hutchison Global Crossing, New T&T Hong Kong and New World Telephone.

David Werner, a telecoms expert and managing director of innerWireless Asia,  said Hong Kong was in really good shape for connectivity and sophisticated telecommunications technology.

'Hong Kong probably leads the world in the number, size and distribution of telecoms and high-speed wireless technology. There are very few other places where your mobile phone will work with the same reliability under ground, in railway tunnels, lift lobbies or between tall buildings,' Mr Werner said.

The Office of the Telecommunications Authority (Ofta) is responsible for much of this as it has pushed the regulatory envelope.

This benefits mobile phone users by encouraging compatibility among the various telecoms operators.

'Hong Kong, with one of the highest mobile phone penetration rates in the world, is probably the most competitive telecommunications and wireless environments. When deploying new telecoms and wireless technologies, if a technology works in Hong Kong, it will work anywhere,' Mr Werner said.



Services shine at the push of a button