the department for Enterprise
end of the year.
Sir William Stones of China Light and Power, whom you saw in London last month, was very positive about GEC Alsthom's chances and made little secret of his view that, if the decision was for him alone, he would award them the contract. But he had to take full account of Exxon's views. Mr Clancy of Exxon, who was also in London last month, was much more hard-nosed, arguing that the interests of the Hong Kong consumer as well as his own Exxon colleagues required him to be absolutely sure that they were getting the best value for money. He said that Government financial support for the bidders was of the essence, and claimed that ECGD had been less forthcoming than the French, German and US export credit agencies. I sought to dispel this notion, while making it clear that ECGD could reach a settled view only when they had been able to consider a detailed proposition from the companies, which has only been submitted recently.
7. Hong Kong Electric, the smaller of the two power utilities in Hong Kong, may well award NEI a contract for a further unit for a coal fired power station to follow up an order they won in 1988 in the face of strong competition from the Japanese who supplied the first five units. At £40-50m, this is much more modest than Black Point, but is in its own terms very welcome.
Projects Elsewhere
8. We called on the leading Hong Kong entrepreneur, Mr Gordon Wu, who was energetically pursuing ideas for a number of major projects in the region, notably the Shajiao C power station in Southern China, a mass transit railway in Bangkok, and a power station at Pagbilao in the Philippines. GEC Alsthom is his favoured supplier for all of these. Some are doubtful whether Mr Wu can carry through his ambitious ideas, although he has confounded the sceptics in the past, and should be taken seriously. Export credit is likely to prove problematic for Shajiao C: an issue which has already been considered by Ministers and will need further attention. The Japanese will fight hard for the Philippines project and are said to be offering soft finance. ECGD seem unlikely to have sufficient cover available and there is no ATP available with which to match Japanese soft credit. (Any such Japanese offer seems likely to fall foul of the recently agreed Helsinki package on tied aid credits and we will, if necessary, complain vigorously in OECD.)
ECGD Cover
9. It was clear from our discussions that the availability of ECGD cover, its cost (premium) and the precise terms on which it was likely to be made available were of critical importance in UK companies landing these major contracts.
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