CONFIDENTIAL
Mr. Williamson
(28
GUANGDONG POWER PROJECT
Mr. Myrst...o/r Enter
NOTE OF A MEETING WITH SIR JACK CAT R AT HONG KONG GOVT OFFICE IN
LONDON, 20 MAY 1982
16611
Those present:
Sir Jack Cater Mr Manzie
Mrs Bell
Bust
The purpose of the meeting was to take some informal soundings of the likely position of the Hong Kong Government on the provision of counter guarantees to a possible Bank of China guarantee for the foreign loans involved in the Guangdong project, and on the provision of equity for the project.
Mr Manzie explained to Sir Jack Cater that the questions of counter guarantees and the commitment to equity involvement by non-Chinese interests in the project had been discussed when the GPC/CLP delegation visited the UK in March and with Lord Kadoorie on his recent visit to the UK. Mr Manzie explained that he had now received a formal invitation to hold further discussions in Guangdong on the financing of the conventional island and planned to lead a UK mission to Guangdong at the end of June. In preparation for the mission it was necessary to explore the difficult issues on the financial structure of the project.
Mr Manzie said that the UK Government would not be willing to put equity into the project or provide counter-guarantees. However, the Hong Kong Government had a closer interest in the project and he wondered how Sir Jack saw the likely position of the Hong Kong Government on these issues. Sir Jack said that he could not speak on behalf of the Hong Kong Government, but thought it unlikely that they would be moved from their previously expressed position of being unwilling to contemplate equity involvement in the project. Nor, in his opinion, would the Hong Kong Government be willing to contemplate giving any counter-guarantees. Sir Jack observed that Lord Kadoorie had not raised these issues with him on his recent visit to the UK. Nevertheless, Sir Jack thought it worthwhile to raise the problems with Mr Brembridge on his visit to the UK at the beginning of June.
In the course of conversation Sir Jack observed that Lord Kadoorie's enthusiast for Guangdong project had been well known to the Hong Kong Government for many years, but had found little positive support. Sir Jack also observed that there was a significant element of dissent from the merits of the Guangdong project on the CLP board.
Sir Jack said that he was not certain that Lord Kadoorie and Mr Stones accuractely evaluated Chinese thinking about the project. In his view, the Chinese would pocket any advantage they could gain in negotiations on the project without giving any political goodwill in turn.
Mr Manzie also took the opportunity to discuss textile issues with Sir Jack. Sir Jack said that he was very willing to enter into a debate with the UK textile manufacturers who wished to export more to Hong Kong.
Calterine Beli
Mrs C E D Bell
MEE4b
20 May 1982
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