Mainland link could help challenge domestic energy duopoly
Speculation that local aspiring third-party power producer China Hong Kong Power Development might join forces with a giant mainland partner has shaken up the century-old domestic power duopoly.
Reports at the weekend that China Hong Kong Power is negotiating a potential alliance with China Southern Power Grid, one of the mainland's two electricity distributors, also injected much-needed confidence into the fledgling local joint venture that aspires to be the third electricity supplier in Hong Kong.
But solutions to core issues remain outstanding.
In the latest twist to Hong Kong's power saga, it was reported on Saturday that the mainland power distributor had opened negotiations aimed at acquiring a 30 per cent interest in China Hong Kong Power, the joint venture that is 70 per cent owned by unlisted power producer China Power International Holdings and 30 per cent by media firm Vertex Communications and Technology Group.
The news sent another wake-up call to CLP Holdings and Hongkong Electric Holdings, the local duopoly that is resisting changes to the decades-old Scheme of Control governance system, which ends in 2008.
Industry observers and analysts said a tie-up would boost the credibility and prospects of China Hong Kong Power and added that China Southern Power Grid's role was crucial to the joint venture because of its assets - electricity transmission and distribution networks in five provinces in southern China, including Guangdong.