Reform in doubt as adviser exits Fears have been raised that the government plans minimal reform of Hong Kong's power sector after a key adviser responsible for overseeing the process failed to have his employment contract renewed. Energy adviser Ben Li Pun-sang completed a three-year contract on January 31, a day before the government initiated a two-stage public consultation that purportedly considered future regulatory arrangements for the electricity market. Replying to queries from the South China Morning Post, a government spokeswoman said Mr Li's appointment was always intended to be 'time limited' and that he had concluded his core task of reviewing reforms and developments in overseas markets. Mr Li had led a six-member team of civil servants responsible for carrying out the public consultation and mapping a broad framework for replacing the scheme of control, which expires in 2008. The team would maintain its work and consultancy services and be deployed if necessary, the spokeswoman said. However, Democratic Party member Fred Li Wah-ming said the government should have a team of experts with reform experience and expertise dedicated specifically to the post-2008 regulatory regime. 'The departure of Ben Li means the government lacks experts with experience in power reform, which shows its intention to make minimal changes after 2008,' he said. Sources familiar with the situation suggested that government efforts to cut costs could have been behind the decision. Mr Li, who joined the government in 2002 after spending 26 years in the power sector and several years overhauling the industry in Canada, said he planned to take a break from work. His appointment was viewed as crucial to reforming Hong Kong's power sector as the government has tussled with utilities CLP Holdings and Hongkong Electric Holdings over governance arrangements after the scheme of control expires. A number of regulatory options have been discussed and, in the extreme end, these could involve new sector entrants and a possible separation of power generation and distribution. The utilities have stated their preference for keeping the asset-based control charging mechanism. Critics contend that CLP and Hongkong Electric have some of the highest equity returns in the world for power utilities, while they counter that tariffs are comparable to other major cities and justified by high levels of reliability - a crucial factor in a city dominated by high-rise buildings. Some analysts said the government appeared to favour retaining the scheme of control mechanism with a slight modification in the form of reduced returns for CLP and Hongkong Electric after 2008. An analyst at an American brokerage said Mr Li's departure raised the question of who would be responsible for compiling public views after the first round of the public consultation closed at the end of this month. Another question mark in the second round of consultations scheduled later this year was on who would draw up options for the future regulatory regime, he added. 'The issue became more complicated after a small investor emerged as the third electricity supplier,' he said. 'Overall, Mr Li's departure will not help the reform process, and the government should have an expert team with reform experience in place, not just its own civil servants.' Vertex Communications & Technology Group, a second-board media company headed by former CLP Power general manager and legislator Steven Poon Kwok-lim, and China Power International Holding, one of the mainland's five national independent power producers and headed by former premier Li Peng's daughter Li Xiaolin, last week formed a joint venture to challenge the electricity duopoly. They vowed to import lower-cost electricity from the mainland to Hong Kong in an unprecedented investment that analysts said could help the government bring in competition by prying open power grids privately owned by CLP and Hongkong Electric. Welcoming the potential investment, the government said last week a new entrant would bring in competition and provide a choice of suppliers.