CONFIDENTIAL
179
114170
MDADAN 1516
CONFIDENTIAL
FM BTC HONG KONG
TO IMMEDIATE DTI
TELNO OTTER 236
OF 161142Z DECEMBER 91
AND TO IMMEDIATE ECGD
INFO IMMEDIATE FCO, PEKING, TOKYO
FOR CASEY, PEP
ADVANCE COPY
Pa
Mr Stere
MY TELNO OTTER 235 (NOT TO TOKYO): GORDON WU AND PROJECTS:
SHAJIAO C POWER STATION
SUMMARY
1. GEC ALSTHOM ARE STILL VERY WELL PLACED: IT MAY BE A FURTHER FEW DAYS BEFORE A DECISION IS MADE.
DETAIL
2. GEC ALSTHOM SUBMITTED A REVISED BID ON SATURDAY 14 DECEMBER WITH A REDUCTION OF SOME USD27 MILLION ON THEIR PREVIOUS PRICE. THIS WAS SUBMITTED SIMULTANEOUSLY TO THE GUANGDONG POWER AUTHORITY IN GUANGZHOU AND TO HOPEWELL IN HONG KONG. IT WAS WELL RECEIVED IN HOPEWELL. A GEC ALSTHOM TEAM, REINFORCED BY NEW ARRIVALS OVER THE WEEKEND, TRAVELLED TO GUANGZHOU ON SUNDAY 15 DECEMBER FOR TALKS WITH THE PROVINCE'S POWER AUTHORITY ON 16 AND 17 DECEMBER. GUANGZHOU POWER AND HOPEWELL APPEAR AGREED THAT THEY SHOULD SIGN A LETTER OF INTENT BEFORE THE END OF THIS WEEK.
3. GEC ALSTHOM SAY THAT THEIR CURRENT OFFER OF SUPPORT FROM ECGD
IS SO QUALIFIED AND SO VAGUE THAT THEY CONSIDER IT WOULD BE COUNTER-PRODUCTIVE TO USE IT WITH EITHER THE GUANGDONG POWER AUTHORITY OR HOPEWELL. THEY TOLD ME THAT MANY OF THE QUALIFICATIONS MAY DISAPPEAR OR BE REDUCED IF THEY GET THE LETTER OF INTENT, AS THEY ARE PLANNING TO REVERT TO ECGD AS AND WHEN THEY GET THIS.
4. THE JAPANESE (MITSUBISHI) ARE CONTINUING TO FIGHT VERY HARD.
GEC ALSTHOM BELIEVE THEY WILL GO ON DOING SO EVEN AFTER A LETTER OF INTENT IS SIGNED AND UNTIL THERE IS A FINAL CONTRACT (PROBABLY TWO OR THREE MONTHS AFTER A LETTER OF INTENT). JAMES, GEC ALSTHOM'S MAIN NEGOTIATOR, WAS STARTLED TO RECEIVE A PHONE CALL FROM C.ITOH IN TOKYO AT HIS HOTEL IN HONG KONG ON SUNDAY 15
DECEMBER OFFERING TO JOIN THEM IN THEIR BID AND SHOWING AN AWARENESS OF CONFIDENTIAL FIGURES WHICH THEY HAD PUT TO THE
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