CONFIDENTIAL
From the Minister of State
Alan Williams
Patrick Wright Esq
Private Secretary to the
Prime Minister
10 Downing Street
WHITEHALL
London SW1
Department of Industry
Millbank Tower
London SWIP 4QU
Telephone Direct Line o1-211
3688
Switchboard of 211 3000
2 June 1977
Dear
Patricia
HONG KONG POWER STATION PROJECT
In your letter of 6 May you said that the Prime Minister wished to be informed of the terms of the UK response to Sir Lawrence Kadoorie before any reply was sent to Hong Kong.
Everyone the manufacturers; their bankers; and Government Departments have been aware of the need to demonstrate a positive response to Sir Lawrence's initiative. We have,
We have, therefore, conducted intensive negotiations with all the principal members of a possible consortium, including GEC, Babcock and Wilcox, Balfour Beatty. Lazards have been engaged as the Department's financial advisors for the project.
The result is set out in the attached telex which has been agreed by the industrial members of the consortium. ECGD and Treasury have agreed the passage about export credit finance.
In addition Balfour Beatty (a subsidiary of BICC) have agreed to act as the main turnkey contractor if this proves necessary.
We believe this should be an attractive package and encourage Sir Lawrence Kadoorie to enter into further detailed negotiations which would be conducted in Hong Kong by a team led by a senior Department of Industry official, consisting of representatives of the companies concerned plus Lazards and ECGD.
In the meantime details of the package will be firmed up with the members of the consortium and preliminary discussions begin in Hong Kong.
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