CONFIDENTIAL
SIR LAWRENCE KADOORIE
Brief for meeting on Tuesday 18 April at 4.00 pm
Sir Lawrence Kadoorie has been in London to sign the $90m Loan Agreement for the GEC power station contract in Hong Kong. (The supply contract was signed on Saturday 8 April: Mr Alan Williams, Minister of State, was present.) After his visit to Europe, Sir Lawrence hopes to return to Hong Kong via Peking where he will be having discussions with the Chinese authorities on the supply of coal from China for the power station.
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Sir Lawrence met Mr Alan Williams in London on Thursday 13 April, the day after the Loan Agreement was signed. From this discussion it appears that Sir Lawrence will wish to raise two issues with the Prime Minister:
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The scope for future British exports to Hong Kong. The Department of Industry is now preparing proposals for a further 700 MW generating capacity for the new power station and for the complete renovation of China Light and Power's main transmission system (the latter might provide over £100m worth of orders. for UK switchgear, transformer and cable manufacturers.) The Department hopes that UK industry will also obtain negotiated contracts; without international tender, for this work. There are several other major Hong Kong projects in prospect: electrification of the railway to Canton and, rather further ahead, a 2,000 MW power station which China Light and Power/Esso would like to place alongside the power station which GEC are now tc build. In addition China Light will be carrying out a renovation of the rest of its transmission system.
Sir Lawrence may raise the question of the financing terms for the transmission system. During his stay Sir Lawrence has sought an assurance from the Government that exactly the same financing terms will be offered for the transmission system as for the power station. Sir Lawrence is anxious not to have to pledge the assets of China Light and Power in respect of borrowing by a new subsidiary raising funds for the transmission network. China Light and Power, rather than a company jointly owned by CLP and Esso, will be responsible for the transmission system. This matter is at present being considered by Department of Industry and ECGD officials: a submission will be put to Ministers shortly.