COMMERCIAL IN CONFIDENCE
4
At the end of our discussion, it was agreed that I should explore the feasibility of the CEGB providing consultancy services for our chosen companies (on the basis of specification guidance which CLP will be sending within the next few days) in the hope that, following Governmental/ company discussions, HMG can put fairly specific proposals - including a broad indication of price to CLP/PEPCO by the middle of August. Until he has heard again from us, and has decided whether our approach provides a basis for meaningful discussions, Sir Lawrence Kadoorie will not be allowing presentations from any companies whether British or foreign.
5
In the light of my discussions in Hong Kong last week, it is my view that an approach that involved:
1
the British Government putting forward "nominated" companies eg GEC (turbines); Babcock and Wilcox (boilers);
these companies offering to come together in a joint company in which the NEB had a shareholding;
the use of the CEGB as design consultants and, possibly, as co-ordinators during the manufacturing and construction phase; and CEGB operating assistance;
an indication of a price per kilowatt of installed capacity that broadly matched that quoted by Parsons for Loy Yang;
ten year ECGD facilities in Hong Kong dollars;
the offer of an equity stake in the purchasing Hong Kong company if this was desired within Hong Kong;
diplomatic support to facilitate an arrangement whereby coal was provided from Mainland China and the NCB's technical help on the compatibility of coal from various locations;
the offer of a capability to undertake the later stages of a large development programme (transmission equipment; pump storage scheme; desalination) at prices that would also be internationally competitive
should give Sir Lawrence Kadoorie (and our other supporters on the CLP/PEPCO Board) sufficient scope to persuade their colleagues that a negotiated bid with Britain was desirable.
AJ Mardonald
A J MACDONALD
IC2
Room 610 V/S 215-5015
20 June 1977
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