HOPEWELL Holdings managing director Gordon Wu Ying-sheung signed a letter of intent yesterday with the Shenzhen Government and the Shenzhen Energy Corporation for the construction of a US$2.3 billion (about HK$17.8 billion) coal-fired power station.
Under the deal, the Hopewell Holdings' subsidiary, Consolidated Electric Power Asia (CEPA), will build four 660 megawatt units in the first phase of the new Shenzhen Eastern Power Station.
CEPA shares will open for trading on the Hong Kong Stock Exchange tomorrow and the signing will see work start on the giant ''build, operate transfer'' (BOT) power station early next year.
The 2,640 MW generators will be the anchor piece at the power station site which has been designed to accommodate another six 660 MW units.
''If the growth rate in Shenzhen continues at its present rate, the region's power needs will be 21/2 today's consumption by the end of the century.
''It will take four years to complete the project and when it comes on-line, it will be just in time to meet Shenzhen's electricity demands,'' Mr Wu said.
CEPA will retain control of the Shenzhen Eastern Power Station for 20 years before it is handed over to the Chinese Government.
Mr Wu said the decision to list CEPA separately followed established procedures for power station companies.
''This is a highly specialised company and all CEPA power plants are being standardised so that we can achieve the economy of scale needed,'' he said.
The CEPA listing was underwritten by Wardley and Peregrine and was oversubscribed by 43 times.
The Eastern Power Station is CEPA's third BOT China power station contract. The company completed Shajiao B at Shenzhen in 1987 and is presently building Shajiao C in Guangdong.
Mr Wu attributed the power station, which is the latest in a long line of successful ventures entered into by Hopewell Holdings, to its customer policy.
''The important thing is that we always think of the customers' needs first,'' he said.
''This is our second project with the Shenzhen Government and it's always a pleasure to have repeat orders. It's important to make a dollar but wherever we are operating we need to have the customer's interest at heart.'' Mr Wu said CEPA is planning to build up to 12 coal-fired power station units in China and is exploring other ventures in the mainland.
The Shenzhen power station will be built on a 150-hectare site at E Gong Wan on the west coast of Da Peng Ban Dao and the electricity it generates will be fed into the Guangdong power grid. When it comes on line in 1998, the power station, which will primarily serve Shenzhen, will also put an end to the regular brown-outs experienced in Guangdong.
CEPA's chief executive officer Stewart Elliott said preliminary talks relating to new power stations had also been held with authorities in the Philippines and Indonesia.
The final details of the letter of intent will be clarified in the lead up to Chinese New Year.
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