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worried that all Sir Lawrence's attempts to create a grand design will founder under close examination by his other colleagues of the price which CLP/PEPCO will have to pay for their new power station. He believes that our crucial need
is to propose a price for the main components of the power station (ie the turbines and boilers) that is so close to any price which could be obtained by open international tendering that Howard Duncan of Exxon (who will be putting up 60% of the capital) can be persuaded to go along with Sir Lawrence's plans on the understanding that HMG is committed to a role in the development of the longer term programme and the provision of the supervisory and operational expertise by the CEGB. Bill Stones maintains that he stressed the vital importance of coming forward with an indication of our outline price for the power station during Sir Lawrence's call on the Prime Minister. In several hours of private conversation with me he has argued that without a "ball park figure" for the power station which is within reasonable limits of valid international bids, we have little chance of persuading the CLP/PEPCO board that we are serious and preventing Exxon from insisting on open tendering.
Alistair Macdonald will tell you that it was not without a struggle that Stones persuaded Sir Lawrence that the question of the price must be faced at an early stage in our negotiations with the result that it now figures as item 3 on the programme of action which was drawn up.
4. Howard Duncan, Chairman of PEPCO and the representative of Exxon, is quite blunt about his position. He starts from the premise that international tendering is the only way to ensure the best deal for CLP/PEPCO although he is prepared to listen to whatever special offer Sir Lawrence can persuade HMG to put forward. But he continually returns to a demand for the "ball park figure" and some guarantee that HMG will be committed to ensuring that the final contract price is consistent with it. He appears impatient that after two months we have not yet put forward a price and obviously has doubts about our keenness and ability to come up with an offer which CLP/PEPCO cannot refuse. With this in mind I recommend that serious consideration be given to presenting our offer under cover of a personal letter from the Prime Minister to Sir Lawrence. To the American representatives on the board, Lippett, Macdonald and March or the Departments of Industry and/or Trade are mere names and Howard Duncan would undoubtedly wish to see written evidence of the earnestness of HMG's commitment. Technical matters he will leave to Stones and Barrett but not the commercial question of price.
5. On the position of Dean Barrett, the Managing Director of CLP, I am less sure. I think he is basically content to go along with Sir Lawrence's plan provided that we recognise that CLP will in the not too distant future need to decide whether to start detailed talks on the basis of our "ball part figure" or to abandon the attempt to fix a British supply and go to
/international....
CONFIDENTAL