TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 14

PS/Minister of State

(Mr Williams)

CONFIDENTIAL

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15 MAY://

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Mr Bullock Mr Lippitt Mr Clark (or)

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Mr Baker

Mr Bryant, OPG Mr Roberts, CRE Mr Havelock, MEPT Mr Mingay, G Mr Paxman, ECGD Mr Stewart, FCO

HONG KONG POWER STATION PROJECT

When he saw the Japanese Prime Minister on 8 May, the Prime Minister raised the issue of the China Light and Power contract and said that "it would be of great assistance to him if Mr Fukuda could ensure that any tender that the Japanese might put in did not cut any corners". After the meeting the Prime Minister asked that HM Ambassador in Tokyo be informed so that he could "follow up as appropriate".

2

Officials have considerable reservations about an initiative of this nature. It is very likely that, in one way or another, our actions would become known both in Japan and in Hong Kong. This could make it more difficult for Sir Lawrence Kadoorie to persuade his board (several members of which, we know, are more pro-Japan than pro-British) that the offer which is eventually put by GEC is acceptable.

3

The attached draft Private Secretary letter to No 10 (which has been agreed with the Department of Trade and the Foreign and Commonwealth Office):

i) points out the difficulties that could arise

if we put too much pressure on the Japanese Government;

ii) seeks guidance on the advice to be given to the HM Ambassador in Tokyo in case Japanese officials raise the issue with him.

AJ Macdonald

A J MACDONALD

IC2

Room 610 V/St

215 5015

12 May 1977