CONFIDENTIAL
3
(a)
HMG intended to put specific proposals to CLP/PEPCO as soon as practicable. We hope to do this in August but the timetable might slip (for the reasons given by Mr Williams at his meeting with Sir Lawrence).
the Prime Minister was taking a close personal interest in the work, and was anxious that the UK power plant industry should benefit from the contract.
Points which Sir Lawrence might raise:
IMPACT OF MULTI FIBRE ARRANGEMENT NEGOTIATIONS ON THE POWER STATION CONTRACT
The Prime Minister will see from Paragraph 3 of Sir Lawrence's own prepared notes for his meeting with Mr Williams (Annex B) that he is concerned lest the MFA discussions create a climate of opinion in Hong Kong that was not favourable to a British order for the power station. The Prime Minister might indicate that he saw no reason to think there would be a serious conflict. Everyone saw advantage in a stable arrangement and Hong Kong had shown an encouraging flexibility and willingness to recognise EEC difficulties.
(b) WILL THE DIFFICULTIES WITH THE GOVERNMENT'S RESTRUCTURING PLANS FOR THE POWER PLANT INDUSTRY AFFECT THE ABILITY OF UK COMPANIES TO TAKE ON THE CLP PRODUCT?
Line to take: No. The companies we put forward will be fully able to meet CLP/PEPCO's needs.
(c) WITH WHOM WILL CLP/PEPCO NEGOTIATE?
Line to take: The package will be put forward by HMG. As Bir lawrence understands, HMG cannot itself sign the contract. We realise that it might be inconvenient for CLP/PEPCO to have to sign individual contracts with companies, particularly if the package involved a considerable number of suppliers. We will know the extent of this problem when we have established the scope of the package. One possibility is for the main companies to form a company to handle this contract. The NEB might have a shareholding in the company. However, we are not convinced that this would lead to a lower price for CLP eg it would introduce problems of joint and several responsibility.
IC2
Department of Industry
25 July 1977