TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 11

From the Minister of State

Alan Williams

CONFIDENTIAL

CONFIDENTIAL

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Department of Industry

Millbank Tower

London SWIP 4QU

Telephone Direct Line 01-211

Switchboard 01-211 3000

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3688

P.R.H. Wright Esq.,

Frivate Secretary to the

Prime Minister,

10, Downing St.,

London, S.W.1.

Dew Patrick,

M. Doutor

MR.

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13th May 1977

HONG KONG POWER STATION PROJECT

(40

57

PS/SOS PS/Secretary Mr Bullock Mr Lippitt Mr Clark Miss Mueller Mr Havelock Mr-Macdonald

IC

Mr. Williams has seen your letter of 9th May which recorded that the Prime Minister had asked that HM Ambassador in Tokyo should be informed of the Prime Minister's discussion of the Hong Kong power station project with the Japanese Prime Minister the previous day.

Mr. Williams agrees that we must keep HM Ambassador in Tokyo informed about the China Light and Power discussions. However, it is delicately balanced whether the British interest is best served by putting open pressure on the Japanese in respect of this contract. If it became known that Britain had exerted pressure on Japan not to put in as competitive a tender as they might otherwise do (and if the Japanese Government passed this message on to their industry, as they would have to for it to become effective, it would almost certainly become public knowledge) the repercussions in Hong Kong might actually destroy our chances of winning the contract. For it would appear that Hong Kong consumers were being required to bear the consequences of uncompetitive contracts from Britain and were being denied the benefits of more competitive bids. .Given prevailing attitudes in Hong Kong, this could make it difficult for Sir Lawrence Kadoorie to persuade his board and shareholders that the British tender was acceptable. This fear is endorsed by the Senior British Trade Commissioner in Hong Kong, who knows Sir Lawrence well.

CONFIDENTIAL

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