GR 550
PRIORITY
CYPHER/CAT A
FM HONG KONG 120430Z
CONFIDENTIAL
CONFIDENTIAL
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1
TO PRIORITY F C O TELNO 268 OF 12 MARCH.
blin Robert CREX
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Stifler Baker Lista
Лара
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Tiny Havelock (331)
of
FOR P.U.S. FROM GOVERNOR.
SIR LAWRENCE KADOORIE, CHAIRMAN OF CHINA LIGHT AND POWER, IS ARRANGING TO SEE SIR PETER CAREY IN DOI EITHER IN THE WEEK STARTING
25TH MARCH OR IN THE WEEK STARTING 4TH APRIL. THE SUBJECT OF THE
VISIT IS CLP'S PURCHASING REQUIREMENT FOR GENERATING EQUIPMENT IN
THE 1930S.
2. BETWEEN 1982 AND 1987 THEY WILL NEED FOUR 350 MW UNITS.
SIR LAWRENCE WOULD LIKE CLP TO CONTINUE WITH ITS POLICY OF BUYING
BRITISH EQUIPMENT. WHILE THIS WISH IS BASED TO A DEGREE ON SENTIMÉNI
IT STEMS ALSO FROM HIS APPRECIATION BOTH OF THE POLITICAL NEED
FOR THE TIES BETWEEN BRITAIN AND HONG KONG TO BE SEEN TO BE STRONG
AND OF THE IMPORTANCE OF STIMULATING BRITISH EXPORTS TO HONG KONG
IN THE INTERESTS OF HONG KONG'S TRADE WITH BRITAIN.
3. HIS DIFFICULTY IS THAT, IN NORMAL CIRCUMSTANCES, BRITISH EQUIPMENT IS PROBABLY 20% HIGHER IN PRICE THAN JAPANESE. HE
COULD HARDLY BE EXPECTED TO PERSUADE HIS BOARD TO BUY BRITISH IN THESE CIRCUMSTANCES, OR FACE THE INEVITABLE PUBLIC CRITICISM, INEVITABLE BECAUSE THE JAPANESE WOULD CERTAINLY PUBLICISE THAT THEY COULD HAVE PROVIDED MUCH LESS EXPENSIVE EQUIPMENT.
4. SIR LAWRENCE WILL NEED TO SIGN A CONTRACT BEFORE THE END OF
THIS YEAR. WHAT HE NEEDS TO KNOW NOW IS WHETHER BRITISH SUPPLIERS
AND THE BRITISH GOVERNMENT WOULD FAVOUR THE IDEA OF A SPECIAL
NEGOTIATED PRICE THAT COULD BRING BRITISH EQUIPMENT WITHIN SAY, 5 TO 6% OF THE JAPANESE. WITH A MARGIN OF THIS SIZE, HE THINKS HE WOULD BE ABLE TO PERSUADE HIS BOARD TO ACCEPT BRITISH EQUIPMENT
WITHOUT INVITING TENDERS WORLD-WIDE: AND THAT HE COULD FACE ANY PUBLIC CRITICISM. CERTAINLY, THIS GOVERNMENT WOULD HAVE NO DIFFICULTY IN DEFENDING HIM IN SUCH CIRCUMSTANCES AND I HAVE TOLD
HIM SO.
CONFIDENTIAL
/5. HE