Secretary for Economic Development and Labor Stephen Ip said here Saturday that the Hong Kong Special Administrative Region government's proposal to lower permitted rates of return for the two power companies is reasonable, adding the utilities should consider the present economic situation and public aspiration.

Speaking on a radio talk show Saturday morning, Ip said the two consultations on the power market finished in March and about 17,000 position papers were received.

The HKSAR government is now analyzing the views and will present the results to the Legislative Council at the end of May, he said, adding the government will also modify its power market proposal according to the results and discuss the issue with the two companies.

Ip said he was confident an agreement can be reached with the power companies before the existing Scheme of Control Agreements expire in 2008.

However, he said it will take some time to conclude the discussion because it involves many complicated issues and both sides should not make any hasty decisions.

The secretary said the government is assessing China HK Power's application for supplying electricity to Sha Tau Kok residents, adding the company has been asked to submit more information on power supply stability, environmental protection, planning and land use.

Source: Xinhua