PP DO 1
282
CYPHER CAT A
Riza Ficte Copy
DISTRIBUTION
HkKiladi.
RECEIVER
2 QJUL 1978
024X OFFIC28
INDEX
FM BTC HONG KONG 201025Z
CONFIDENTIAL
PA
211.
TO PRIORITY DO I TELNO INDUS 87 OF 20 JULY 1978.
FOR THORNTON EPT1.
GEC GAS TURBINES.
185
TRAD @
PUSD (2)
WHEN STONES CALLED YESTERDAY TO DISCUSS OUR EHV TRANSMISSION
OFFER, HE EXPRESSED EXTREME IRRITATION WITH GEC. HE RECALLED THAT
THE ORIGINAL PRICE OFFERED ON THE GAS TURBINES WAS POUNDS STERLING 4.1 MILLION. THIS WAS SUBSEQUENTLY REDUCED TO POUNDS STERLING 3.955 MILLION IN JANUARY AND TO POUNDS STERLING 3.64 MILLION IN THE PROPOSALS WHICH I DELIVERED TO SIDNEY GORDON ON 14 APRIL
WHR (SEE MY INDUS 5%).
117
2. STONES EXPLAINED THAT THE PRICE REDUCTION WAS ACHIEVED BY
GEC OMITTING THE COST OF ANCILLARY ITEMS SUCH AS THE CHIMNEY, THE OUTSIDE HOUSING AND FIRE-FIGHTING EQUIPMENT. THE PRICE REDUCTION ENABLED STONES TO PERSUADE THE KESCO BOARD TO ACCEPT THE GEC OFFER (MY INDUS 56 OF 18 MAY).
3. STONES NOW REPORTS THAT IN THE CONTRACT DOCUMENTS DELIVERED
LAST WEEK BY WEEJON, EEC AGAIN QUOTE A PRICE OF POUNDS STERLING 3.955 MILLION. THIS COMPLETELY UNDERMINES THE BASIS ON WHICH THE KESCO BOARD MADE THEIR DECISION AND GIVEN ESSC'S WELL KNOWN DOUBTS ABOUT THE COMPETITIVENESS OF THE GEC GAS TURBINES, STONES IS UNABLE TO PROCESS THE CONTRACT FURTHER. HE REQUESTS THAT THE COST OF THE ANCILLARY ITEMS BE REGARDED AS AN EXTRA ITEM NOT INCLUDED
IN THE CONTRACT OFFER.
4. I HAVE DISCUSSED THIS WITH WEEDON WHO TELLS ME THAT HE ALREADY WAPNED RIZK, MANAGING DIRECTOR OF GEC GAS TURBINES, OF STONE'S REACTION. YOU SHOULD ALSO KNOW THAT STONES IS NOT SATISFIED WITH GEC'S LATEST OFFER ON DELIVERY,
MARCH