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Industry Act 1972 assistance. It was agreed that assistance under Sections 7 and 8 was not likely to be very useful for Stage 1 of the project since the contract would not result in the creation of substantial new capacity or jobs in the power plant industry. Mr Havelock confirmed that no applications from GEC for selective financial assistance were being considered at present.
Credite mixte. Mr Duffy said that Hong Kong was not one of those countries which normally qualified for overseas development assistance. There was therefore no aid to which this particular contract could be tied.
ECGD. Although ECGD services appeared to provide the best means of assisting a UK bid, Mr Paxman emphasised that ECGD still did not know sufficient about CLP and its financial position to say how helpful they could be, neither had they yet received any application in respect of this project. The picture was made more complicated by the references which had been made to a new company being set up in Hong Kong to manage the project, in which Esso, who were already associated in some way with CLP, might take a share. Adequate security would be an important consideration in a project of this size. ECGD would be attempting to find out as much as they could about CLP through their own channels. Two other projects in Hong Kong had given them some recent experience on which to build. Mr Mann warned that if the CLP project was opened to tenders from abroad, recent experience had shown that Japanese companies were able to undercut foreign competition by as much as 30%. In. this case there was little that ECCD could do. Export credit competititon was officially controlled by international agreement and other countries such as Japan and France could be expected to match any terms which ECGD were able to offer. As far as repayment terms were concerned ECGD could offer no more than the internationally agreed limit of 12 years from the date of commissioning. The general view was that it would be more prudent to talk initially about a period of 8 years while being prepared to improve upon this as necessary. Normal arrangements for Hong Kong were to offer cover on 85% of total UK content although some cover for local costs was possible and could be held in reserve. Mr Paxman also emphasised that there could be no question of flexible credit terms related to the earnings of the new power station.
GEC's current application for OPG assistance.
6 Mr Bryant explained that OPG rules permitted assistance to only one company in respect of each project and up to a maximum of £100,000, beyond which BOTB approval would have to be sought. GEC's current application would take up nearly half this sum. If Babcock & Wilcox were interested in this project they ought to consider adding to GEC's application.