IMMEDIATE

0418

OVANCE COPYNO Distempera

DISTRITS

344

HD/HKG D

D/B

110900

Akle164/1

HOFO 004/11

RI

00 D 0 1

DESKBY 110900Z

GR 375

убай

UNCLASSIFIED

COMMERCIAL-IN-CONFIDENCE

DESKBY 110900 Z

FM BTC HONG KONG 1103512 DEC 78

TO IMMEDIATE D.0.1.

TELNO.INDUS 226 OF 11 DECEMBER,

AND SAVING TO PEKING.

FOR HAVELOCK.

MY INDUS 223: HONG KONG TRANSMISSION SYSTEM.

FOLLOWING IS TEXT OF RELEVANT EXTRACT FROM KADOORIE'S AGM STATEMENT TO BE MADE AT 0930Z TOMORROW TUESDAY 12 DECEMBER:-

**IN MY REVIEW, I ALSO MENTIONED THAT YOUR COMPANY HAD DECIDED TO DEVELOP A 400KV TRANSMISSION NETWORK, WHICH WOULD TRANSFER ENERGY FROM CASTLE PEAK POWER STATION TO THE MAJOR LOAD CENTRES.

FOLLOWING DISCUSSIONS WITH SENIOR MEMBERS OF HER MAJESTY'S GOVERNMENT IN LONDON LAST MAY, THE DEPARTMENT OF INDUSTRY IN THE

UNITED KINGDOM SUBMITTED A PACKAGE OFFER COVERING THE SUPPLY AND ERECTION OF THE REQUIRED EQUIPMENT AND LONG-TERM FINANCING BY A SYNDICATE OF BANKS SUPPORTED BY THE EXPORTS CREDITS GUARANTEE DEPARTMENT.

THIS OFFER WAS SUBJECTED TO DETAILED EVALUATION USING BOTH IN-COMPANY RESOURCES AND THOSE OF AN INDEPENDENT CONSULTANT ENSURE THAT THE EQUIPMENT PROPOSED MET OUR TECHNICAL SPECIFICATIONS AND THAT THE PRICE WAS INTERNATIONALLY COMPETITIVE.

-

-

TO

ON THE BASIS OF THIS EVALUATION AND FOLLOWING FURTHER DISCUSSIONS IN HONG KONG, A SATISFACTORY UNDERSTANDING WAS REACHED REGARDING SCOPE OF SUPPLY AND PRICE.

ACCORDINGLY, I AM PLEASED TO INFORM SHAREHOLDERS THAT A CONTRACT FOR THE TRANSMISSION NETWORK WILL SHORTLY BE SIGNED WITH BALFOUR BEATTY, THE CONTRACTOR NOMINATED UNDER THE UNITED KINGDOM OFFER. THE VALUE OF THIS CONTRACT WILL BE APPROXIMATELY £100 MILLION.

THIS IS THE SECOND MAJOR CONTRACT, WHICH WILL BE AWARDED AS A RESULT OF A PACKAGE OFFER FROM THE UNITED KINGDOM. IN APRIL, A CONTRACT WORTH APPROXIMATELY £150 MILLION WAS PLACED WITH GEC TURBINE GENERATORS LTD BY YOUR ASSOCIATED COMPANY, KOWLOON ELECTRICITY SUPPLY CO.LTD, IN RESPECT OF THE SUPPLY OF GENERATING

EQUIPMENT FOR THE CASTLE PEAK POWER STATION.

THE NEW POWER STATION AT CASTLE PEAK AND ITS ASSOCIATED 492KV TRANSMISSION NETWORK WILL PROVIDE AMPLE JOB OPPORTUNITIES FOR OUR BETTER EDUCATED AND MORE SOPHISTICATED YOUNGER GENERATION,

THE INTRODUCTION OF OVERSEAS EXPERTISE AND OF SPECIAL EQUIPMENT, SUCH

AS A SIMULATOR COSTING OVER £1 MILLION, WILL ENHANCE THE TRAINING AND RESULTING JOB SKILLS OF EMPLOYEES.''

FCO PLEASE PASS SAVING TO PEKING.

MARCH

NNNN

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