COMMERCIAL IN CONFIDENCE
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Sir Lawrence Kadoorie and all the Hong Kong interests present made it clear that there could
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be no question of an order for power station equipment unless the price put forward was competitive on an international basis. Sir Lawrence emphasised that he was looking for a competitive price on a "normal" basis: he would not look to British companies to match "suicidal" prices which were sometimes put forward by companies absolutely desperate to obtain orders;
CLP were anxious that we should explore the possibility of denominating the buyer credit loan in Hong Kong dollars;
the possibility of an investment by UK interests the contracting companies - in the new company which would purchase the facilities was greeted with less enthusiasm than I had expected. Sir Lawrence acknowledged that the proposal had political attractiori and he was anxious to emphasise that participation by British interests in the purchasing of Hong Kong companies was not ruled out". I learnt after the meeting that this reflected what was possibly the most important change which had occured since Sir Lawrence Kadoorie saw the Prime Minister in March. At that time Esso had been showing reservations about the possibility of an Esso involvement in the company which would purchase the new power station. Sir Lawrence was therefore concerned that insufficient funds would be found to make the power station proposal practicable: he had therefore floated the possibility (both the Prime Minister and to the Governor) of a direct investment of British interests eg CEGB or contracting companies in the purchasing company. In recent weeks Esso have decided at local level (the Hong Kong management needs of course, to persuade Houston) that an investment in the new power generating company should be highly attractive. Esso have therefore indicated a desire to take up the full 60% of
the equity in the new company which, under previous arrangements, they have the right to purchase.7
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