TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 120

AR 450

CYPHER/CAT A

FM HONG KONG 271003Z

CONFIDENTIAL

33

CONFIDENTIAL

TO ROUTINE F C O TELAO 419 OF 27 APRIL 197 INFO PEKING (FOR AMBASSADOR).

R+

RE

20 Arka

24

YOUR TEL. 247%

MKK 164

POWER STATION FOR HONG KONG.

PLEASE PASS TO SIR PETER CAREY, D.0.1.

20 ACCORDING TO THE RECORD SIR LAWRENCE HAS SHOWN ME OF HIS MEETING

a

SOMETHING

WITH THE PRIME MINISTER, HE EMPHASISED THAT PRICE WAS NOT THE SOLE CRITERION, AND THAT HE NEEDED A NOVEL APPROACH DIFFERENT FROM THE USUAL PROCEDURES OF COMMERCIAL NEGOTIATION THAT WOULD BE A TOTAL PACKAGE.

2. HE TOLD ME THAT IN SPEAKING IN THIS WAY HE HAD IN MIND THE

DIFFICULTY OF PERSUADING HIS BOARD (WHICH INCLUDES ESSO) NOT TO GO

TO INTERNATIONAL TENDER IF HMG SIMPLY OFFERED WHAT SEEMED A COMPETITIVE PRICE. THIS IS UNDERSTANDABLE. HE THEREFORE HOPES FOR A NOVEL PROPOSAL THAT FOR ONE REASON OR ANOTHER EVADED COMPARISON WITH ANY BID LIKELY TO BE MADE BY THE JAPANESE. THE IDEAS HE THREW

OUT INCLUDED:-

(A)

A WHOLE.OR PART EQUITY POSITION BY THE SUPPLIERS

(B) THE STATION TO BE BUILT BY CEGB BOTH AS CONTRACTORS AND EQUITY

HOLDERS IN WHOLE OR IN PART (IN OTHER WORDS THAT CEGB SHOULD BUILD DRAX 11, FOR THE REASONS IN THE CPRS REPORT; IN HONG KONG RATHER THAN YORKSHIRE)

THE PRICE TO BE PAID IN WHOLE OR IN PART ON A HIRE PURCHASE SYSTEM, E.G. AS A PRECENTAGE OF UNITS OF ELECTRICITY SOLD.

CONFIDENTIAL

/ (D) TO NEGOTIATE

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