From the Minister of State
Alan Williams
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The Rt Hon Joel Barnett Esq
Chief Secretary to the Treasury
HM Treasury
Parliament Street
LONDON SW1
لله
EF
Department of Industry
Millbank Tower
London SWIP 4QU
Telephone Direct Line 01-211
Switchboard 01-211 3000
19 September 1977
3 for 145
3688
Hem Joel.
HONG KONG POWER STATION PROJECT
HKGD
f
PS
PS/LE ROBERTS P3/PU3 MR. CORTAZZI Me. MURRAY
FED TRED
In my letter of 1 August, I set out the broad lines of the proposals my Department was developing in respect of this project. Since then:
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we have received formal tender documents from
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GEC who now propose to act as main contractor with Babcock and Wilcox (boilers) and Mouchel and Partners (civil engineering designs) as sub-contractors for the power station development. We hope to receive proposals from Balfour Beatty, the other contractor, within the next few days;
the GEC and Babcock prices have been reviewed in detail on our behalf by RTZ, who have commented that in UK terms the prices quoted are very competitive. At our request GEC are now examining the scope for a further cut in their price but this is bound to be small and we wish to reserve it to concede in the course of the detailed negotiations;
discussions with ECGD and the Bank of England in London and with the Hong Kong banking community suggest that, while many points of detail still have to be resolved, there appear to be no insuperable difficulties to an offer of buyer credit in Hong Kong dollars;
officials from this Department have had discussions with Treasury officials on the provision of the services and experience of the Central Electricity Generating Board. We expect the CEGB services to cost, at 1977 prices, between £4m and £5m between now and 1984. While the arrangements for making payments to the CEGB still have to be settled, I hope the Treasury will agree in principle that we may provide these services.
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