I
COMERCIAL I CONFIDENCE
2.
expenditure on plant for the new power station will be of the order of £250 million.
3. Stones is concerned that the Board may not find it possible to avoid going out to some form of competitive tender for the new plant. I believe he is working towards a compromise, a proposal that tenders should be invited, but restricted to British companies. This would lead to competition between GEC and Reyrolle Farsons, about which John Weedon of GEC is not at all happy as he believes Stones has a bias in favour of Parsons. Even if this is correct, I doubt that it would prejudice the award of any contract and I have suggested to John Weedon that competition between two British companies would be very much better than having to face Japanese competition in an international tender. He accepts this.
4.
I have little doubt that Stones' views will carry considerable weight with the Board. We can take it that he will do his utmost to see that the plant is British and there is one way in which we can give him some immediate help which will be of practical significance and importance for the future. Stones believes very strongly that it is important that the sale of generating equipment must be the concern of industry as a whole in Britain, and that it must be prepared to provide the necessary technical and managerial back-up in places like Hong Kong to supplement the efforts of the manufacturers selling the equipment. Before Stones himself arrived the Tsing Yi power station was in a mess. While there were faults with the equipment, much of the problem lay with inexperienced staff who were not really capable of assembling and operating high performance modern plant. Bill Stones has put all this right. I am quite convinced that without his efforts there would have been no prospects whatsoever of PEFCO contemplating, let alone agreeing to negotiate further contracts direct with GEC or going out to tender restricted to British companies. If the first of the new generators is to be commissioned by 1981/82, a decision will have to be made on this point in the Spring of next year; the continuing successful operation of the plant at Tsing Yi and the knowledge that staff will be available to ensure the successful operation of any new station could be, if not decisive, at least very influential in any decision the Board comes to.
5.
When I asked Stones whether he had any immediate problems or whether I could be of any help, he told me that he had applied through Fenton of the Electricity Council Overseas Consultancy Service for an experienced Station Superintendent to be seconded
COMERCIAL IN COMFIDEACE
/to........