before the end of the year and wants to know whether British suppliers and the British Government would favour the idea of a special, negotiated price that could come within 5 to 6% of the Japanese. With a margin of this size he thinks he could persuade his Board to accept British equipment without going to world-wide tender, and to reduce public criticism. (He has been told that in those circumstances the Hong Kong Government would be prepared to defend him from criticism). One obvious difficulty will be, to decide what the Japanese bid might be; in the case of the recent Korean project Asan the British bid was on a par with that of Hitachi. However, the Japanese are prepared to conclude contracts involving a loss in order to move into new territory, or where this puts them in a position to get further work when stations are extended; they used this tactic in the last year to win orders in Canada and Australia.
LINE TO TAKE
Make reference to the long established links between the China Light and Power Company and the UK power plant industry and the need to maintain and stimulare the existing trade and political links between the two countries. Sir Lawrence's desire to place the Castle Peak order with the UK is very much appreciated. He can be assured that the Government will do everything in its power to ensure that the UK companies will be able to provide a bid on terms which we hope he will be able to recommend to his Board. These would include flexible ECGD financing.
UK Trained Personnel
Mr. Stone believed to favour GEC equipment and he considers that British trained personnel for the operation of the new station to be essential. We have taken this up with the Department of Energy and a nomination for the Chief Engineer has already been put to the CLP.
Boilers
GEC are the natural choice for the supply of turbine generators for the new station because of their long association with CLP. The position on boilers needs clarifying. Previous contracts have gone to Clarke Chapman but we have been told by Babcock and Wilcox that they may be asked to supply them for Castle Peak. Sir Lawrence should be asked which of the boiler makers he has in mind.