San Hing (LPG) Co Ltd has supplied LPG to Discovery Bay through a dedicated, reticulated supply network since 1983. Efforts over the years to find out why San Hing has a monopoly, and the terms under which it supplies LPG to DB, have met a brick wall — until now.
With the enactment of the Residential Properties (First-hand Sales) Ordinance in 2013, the developer, Hong Kong Resort Company Limited (HKR), came under a statutory obligation to provide details of such supply contracts in the sales brochure for new residential developments. The Amalfi development, re-launched in December 2013, was the first phase in DB to fall under the Ordinance, and its sales brochure provided a very interesting revelation.
Even though the terms of the Deed of Mutual Covenant (DMC) require that the DB management company, Discovery Bay Services Management Ltd (DBSML), represent the DB owners in all contracts with suppliers, supply of LPG is governed by a contract with HKR.
Full details are provided in the Open Letter to Mr. Vincent Chua, Director of DBSML, below.
Mr. Chua replied to the above letter, making reference to the provisions in the DMC regarding supply of electricity by CLP Power. Mr. Chua advised that the arrangements for San Hing followed those for CLP Power.
This is blatantly false, as explained in the following Open Letter.
No reply has been received to this second Open Letter, and the very worrying issues raised about the security of LPG supply to DB remain unresolved.
The supply agreement between HKR and San Hing expires on 31 May, 2020, and there is no guarantee that it will be renewed. San Hing has all along enjoyed the profits of supplying LPG while the system was new and maintenance requirements were minimal. As the network reaches the end of its service life and maintenance requirements start to rise, what is to prevent San Hing from concluding that the maintenance cost is too great to bear? San Hing has no obligation to renew the contract in 2020 on the same terms as at present. What then?
Thus, the owners of residential properties in DB face a huge potential liability for the maintenance of the LPG reticulation network in future. The fact that Mr. Chua has not responded to deny these concerns, or to provide a road map beyond 2020, speaks volumes in itself.