COMMERCIAL IN CONFIDENCE
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Until specific proposals had been received from the British Government he would not allow any presentation by interested British companies. By the same token, until CLP/PEPCO had formally decided that the British proposals were unacceptable Sir Lawrence would not allow any other company which had shown an interest to make a presentation;
CLP/PEPCO had not yet completed negotiations with the Governor of Hong Kong on a Scheme of Control for the company which would purchase the new power station. Negotiations would be resumed early in August with the hope of concluding them in September.
The basis of discussion was that PEPCO (in which Esso had a 60% interest and CLP a 40% interest) should be responsible for all future power generation and that CLP should manage the facilities. At present, the agreed rate of return was 13% of the net fixed assets. The companies were trying to negotiate a different arrangement for
a new Scheme of Control whereby they would receive
a fixed sum per unit sold. In this way they would receive a variable sum which reflected the electricity actually consumed;
the envisaged development programme would take the following order: a 100 MW gas turbine which should come into operation in 1981; the provision of common facilities for 4 x 350 MW coal/oil fired units, the first of which should come into operation in 1982 and the second in 1983, with the expectation that the other two would come onstream in 1985 and 1987, (the Governor of Hong Kong had three days previously proposed a site in the North East corner of Lan Tau island which appeared fairly attractive to CLP/PEPCO); a 345 kV or 400 kV transmission system; coal handling facilities for the import of coal from Australia or China; pump storage equipment (on this CLP's thinking was at a very preliminary stage and it was unlikely that the facilities would be in operation before 1983 or 1984.) The proposal for a desalination plant was at this stage more a matter for the Governor of Hong Kong than for CLP and we were urged not to include this in our plans at the present time;
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