Press Release



Contracts awarded for dedicated LPG filling stations


Two design, build and operation contracts for five dedicated liquefied petroleum gas (LPG) filling stations in the urban area and New Territories East are awarded today (Friday).

The first contract, with two stations in Chai Wan and West Kowloon providing a total of 48 dispensing nozzles, is awarded to Towngas LPG Company Limited, who offered LPG initial maximum price of $ 2.04 per litre up to January 31, 2002.

The second contract, with three stations at Sheung Wan, Kwun Tong and Tai Po providing a total of 60 dispensing nozzles, is awarded to China Resources Petrochems (Group) Co., Ltd., who offered LPG initial maximum price of $ 2.01 per litre up to January 31, 2002.

"A pricing formula has been specified in each contract that will set the ceiling price of auto-LPG during the whole operating period," Director of Electrical & Mechanical Services, Mr Leung Cham-tim, said today (Friday) after officiating at a signing ceremony for the award of the two contracts.

"The formula comprises two elements, LPG international price element and LPG operating price element. The first element will be adjusted twice a year by the average LPG international price in the preceding six months," Mr Leung said.

"The second element will be adjusted yearly according to movement in the Composite Consumer Price Index in the previous year. The LPG operating base price of the second element was bid by the tenderers," he said.

"An initial maximum price of auto-LPG up to January 31, 2002 was also bid by the tenderers such that the actual ceiling of auto-LPG price for this initial period would be either the auto-LPG price calculated by the formula or the proposed initial maximum price whichever is the lower," he said.

"When tender for the two contracts closed on January 21, 2000, six tenders had been received. Each tender contained a technical proposal for the LPG filling stations and a commercial proposal on the LPG initial maximum price up to January 31, 2002 and the LPG operating base price for the pricing formula," he added.

"The tenders were evaluated by an assessment panel comprising seven government bureau and departments so as to select the overall best offer based on the technical proposal and commercial proposal in each contract," Mr Leung explained.

"The two successful tenderers shall complete the construction of the stations within 270 days from today and operate the stations until expiry of the contracts in 2021. They will be responsible for their own costs of design, construction and operation of the stations as well as all associated expenses," Mr Leung said.

Deputy Secretary for the Environment and Food, Mr Kim Salkeld, welcomed the award of the contracts, saying that the strategic locations of the dedicated stations and the very competitive auto-LPG prices would offer convenience and substantial savings in fuel costs to taxi operators.

"In addition to the dedicated stations, LPG filling facilities will be provided at suitable existing and new petrol filling stations from mid-2000," Mr Salkeld said.

"We are determined to achieve and sustain healthy air quality for Hong Kong. The award of the five dedicated stations at nil land premium serves to underline our commitment to reaching this goal," he added.

End/Friday, February 18, 2000