CONFIDENTIAL
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MDHIAN 0633
CONSULTANCIES THAT HAD ALREADY BEEN WON WERE UK OR HK/UK CONSORTIA. HE THOUGHT IT CRUCIAL THAT THE HONG KONG GOVERNMENT WAS SEEN TO OPERATE A FAIR SYSTEM TO ALL, AND THIS WAS THE LINE HE WAS TAKING WITH THE CHINESE GOVERNMENT, WHO HAD INTIMATED THEIR HOPE THAT PRIORITY WOULD BE GIVEN TO HONG KONG FIRMS. AS FOR MORGAN STANLEY WINNING THE FINANCIAL CONSULTANCY, IT WAS SIMPLY A CASE OF A BETTER BID AND A BETTER PRESENTATION.
6.
THE SECRETARY OF STATE RAISED OTHER MATTERS OF CONCERN, NAMELY THE BIDS BY TWO BRITISH COMPANIES (VOSPER THORNYCROFT AND FBM MARINE) FOR A CONTRACT FOR POLICE PATROL BOATS. HE FELT THESE TWO COMPANIES WERE PARTICULARLY STRONG EMPLOYING STATE OF THE ART TECHNOLOGY. THE GOVERNOR RESPONDED THAT EITHER WOULD WIN IF THEY
PUT IN THE BEST BID.
MR ADAMS ASKED ABOUT THE GOVERNOR'S VIEW ON THE POWER SECTOR. THE GOVERNOR EXPLAINED THAT DAYA BAY WOULD COME ON STREAM IN FOUR YEARS' TIME, BUT THERE WAS A NEED FOR MORE POWER GENERATION AND THERE WERE PLANS FOR A NEW POWER STATION WHICH WOULD ALMOST CERTAINLY BE SITED AT BLACK POINT IN HONG KONG. CHINA LIGHT AND POWER WERE DETERMINED TO GO AHEAD AS WERE EXXON, BUT WERE INEVITABLY CONCERNED ABOUT POST-1997 GUARANTEES. CHINA LIGHT AND POWER ENJOYED GOOD RELATIONS WITH CHINA, AND THE PROJECT SHOULD GO AHEAD BUT THE CHINESE GOVERNMENT MIGHT CHOOSE
THIS AS ANOTHER PEG ON WHICH TO HANG WIDER INVOLVEMENT IN HONG
KONG. MR ADAMS ASKED ABOUT CHINA'S FUTURE PLANS FOR NUCLEAR POWER
STATIONS. THE GOVERNOR SAID THIS WAS AN EMOTIVE ISSUE IN HONG
KONG. IN DISCUSSIONS WITH CHINA'S ENERGY MINISTER HE HAD BEEN TOLD THERE WERE NO CENTRAL GOVERNMENT PLANS TO BUILD ANOTHER NUCLEAR POWER STATION IN SOUTH CHINA SINCE A NUCLEAR POWER STATION COST FIVE TIMES AS MUCH AS A CONVENTIONAL POWER STATION. HOWEVER, CHINA HAD RECEIVED A SOVIET OFFER TO BUILD ONE IN LIAOLING.
8.
THE SECRETARY OF STATE SAID HE HAD BEEN IMPRESSED BY THE AMOUNT OF DEVELOPMENT THAT HAD TAKEN PLACE IN SHENZHEN, AND OF THE ECONOMIC ACTIVITY IN HONG KONG DESPITE THE UNCERTAINTY. THE GOVERNOR AGREED THAT THE SOUTHERN CHINESE PROVINCES WERE TAKING ADVANTAGE OF REGIONAL DEVELOPMENT PERMITTED BY THE GOVERNMENT IN BEIJING, WHICH PLACED HONG KONG IN AN IDEAL POSITION AS AN ENTREPOT INTO CHINA.
ENDS.
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