CONFIDENTIAL
P/A
&
24/6
107
Mr Samuela
сс
24/6
Mr Murray
Mr Stewart
Private Secretary
Mr Roberts, Department of Trade Mr Lippitt, Department of Industry
Sir Murray MacLehose, Hong Kong
Sir Michael Wilford, Tokyo
Mr D March, Hong Kong
HONG KONG POWER PROJECT
1.
When the Japanese Ambassador called on me on 17 June to discuss another matter he told me that he had been instructed to explain "at the highest appropriate level" the Japanese position on the point raised by the Prime Minister with Mr Fukuda during the Summit about alleged Japanese under-cutting in relation to electrical generating equipment in Hong Kong.
2. The Ambassador said Hitachi had been involved for some time with Sir Lawrence Kadoorie. The Japanese understood that Sir Lawrence had thought it desirable to bring in GEC as general contractor for their plans for new electrical generation but wanted to retain Hitachi as a sub-contractor. Hitachi had indeed been looking at various blueprints but had not made any price offer on these plans as so far only a feasibility study stage had been reached.
3. Mr Kato went on to say, emphasising that this was merely a Japanese supposition, that it seemed as though Sir Lawrence Kadoorie had probably come to Britain to tell GEC of an alleged Hitachi offer in order to get better terms out of GEC. This might have led GEC to believe that the Japanese were undercutting them and induce GEC to approach the Prime Minister. Mr Kato c added to say that Mitsubishi were also interested in the present project but they too had not made any offer on price.
4.
Mr Kato said that he had been instructed to say that we should be re-assured that there had been no undercutting by Japan. The fact was that there had so far been no open tender. If there was an open tender there would not be any undercutting by Japan. He implied that Japanese bids would be made in a normal commercial
manner.
5.
I thanked Mr Kato for what he had said and merely undertook to report.
20 June 1977
CONFIDENTIAL
Banc.
HA H Cortazzi