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Mr Blundell )

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Christian Adams

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215 5462

12 December 1988

HKC 166/1

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7! 13/12

пол MEA-N 141n

Mr Benjamin EM Mr Wheeler

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Mr Ludford

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PA

14/12

POWER STATIONS: HONG KONG AND BRITISH BOILER CAPABILITY

May I answer Mr Sansum`s minute of 1 December and Mr Blundell`s minute of 7 December together since they both address this point in different ways?

2.

I was undoubtedly guilty in my minute of 29 November recording my discussion with Mr Stones of taking his comments at face value. He was so dismissive of Babcocks as to suggest that the FKI takeover had brought Babcocks boiler making capability to an end. Mr Sansum`s minute has made clear that this is anticipating the situation somewhat. That said Mr Stones will take much convincing that, in a future CLP power station, he should entrust the boiler to Babcocks.

3.

I doubt whether a public relations operation involving a trip to Hong Kong by the Babcock Energy Division would achieve much. Mr Stones is a cussed individual and would require assurances from FKI which they would not, at this stage, be able to give. But when the situation is clearer, and if it is favourable, then a major effort should be made with Mr Stones.

4. Finally, turning to the point in Mr Blundell`s minute of 7 December about NEI, I hope that it is right that NEI are still internationally competitive in this area. The difficulty in the case of CLP is that Mr Stones has a very low opinion of NEI, an

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