CODE 18-77
S$ 10/76
NOTE FOR THE FILE
CONFIDENTIAL
HONG KONG POWER STATION PROJECT
/Reference. HKK 16+/1 206
D
1. Mr Moulson, DOI (215-3760) telephoned this morning with reference to Mr Duffy's letter of 12 September to Mr Macdonald. He said that Mr Lippitt and also Mr Roberts, DOT, who had been consulted appreciated the point made by Mr Duffy about the possible risks involved in the Prime Minister's writing to Sir Lawrence Kadoorie in view of the difficult situation that has arisen over Hong Kong and the MFA. Nevertheless, they had concluded that they should still advise the Prime Minister to write. Mr Moulson asked me whether there would be strong FCO objections to the DOI's proceeding as they had originally intended. I told Mr Moulson of the present position as regards the Governor's letter of 3 May on the MFA, namely, that the Secretary of State is being advised to send a minute to the Prime Minister and his other colleagues concerned, including the Secretary of State for Industry, which would draw attention, inter alia, to the link which is now being more clearly drawn between what happens about textiles and the British bid for the power station contract. Having done so, I told Mr Moulson that if the DOI remain of the view that they should invite the Prime Minister to write to Sir Lawrence Kadoorie, we would not wish to stand in their way. Mr Moulson was pretty sure that Mr Lippitt would wish to go ahead in this way.
2.
I gave Mr Moulson the amendments to the draft letter to Sir Lawrence Kadoorie which Mr Duffy had marked on the draft. After consulting Mr Orr, FED, I also suggested to Mr Moulson that the word "closely" in what was the second sentence of paragraph 3 of the draft letter should be omitted. Mr Moulson said that he would put these suggestions forward within the DOI.
3. Mr Moulson told me that the DOI hoped to send their proposals to Hong Kong next week, that there are still some points to be sorted out with the Treasury. The plan is for CLP/PEPCO to consider these proposals in advance of a visit by Mr Lippitt and a team of officials and others around the middle or the second half of October.
15 September 1977
J. F. duitton
D F Milton
Hong Kong & General Department
CONFIDENTIAL