CONFIDENTIAL

3. FOR YOUR OWN INFORMATION, WE ARE CONCERNED THAT IF THE JAPANESE GOVERNMENT WERE WILLING TO INTERVENE WITH THEIR OWN INDUSTRY, THIS WOULD BECOME PUBLIC KNOWLEDGE. THE SHAREHOLDERS AND CUSTOMERS OF CLP MIGHT THEN FEEL THAT AS A RESULT OF THE INTERVENTION OF HMG THEY ARE BEING OBLIGED TO ACCEPT A MORE EXPENSIVE POWER STATION. THIS COULD EMBARRASS THE CHAIRMAN OF CLP AND OTHERS IN HONG KONG WHO WANT THIS BUSINESS TO COME TO BRITAIN, AND MAKE IT MORE DIFFICULT FOR THE CHAIRMAN TO PERSUADE HIS BOARD AND SHAREHOLDERS THAT A NEGOTIATED

BRITISH TENDER WAS ACCEPTABLE.

OWEN

COPIES TO:

MR ROBERTS

CRE 4 DOT

MR MCGHIE EJU

DOT

MR DEARING

DOI

FILES:

FED

HK & G D

EID

PRES SEC

FRD

PS

FS/MR JUDD FS/1US

MR CORTAZZI MR MURRAY

MR FRETWELL

2.

CONFIDENTIAL

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