TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 177

CODE 18.77

NOTE FOR THE FILE

CONFIDENTIAL

Reference...

HKK 164/1

15

CHINA LIGHT AND POWER

1.

Mr Peter Bird of the Department of Industry telephoned to say that two meetings had been arranged for Sir Lawrence Kadoorie on 30 March: the first with the Minister of State, Mr Alan Williams; and the second with Mr Peter Carey, the PUS.

2. Mr Bird said that the DOI were considering various methods of meeting Sir Lawrence Kadoorie's proposal for a special negotiated price for the £150 million (approx) power plant including (a) a credit line by ECGD, (b) British companies taking shares in China Light and Power, and (c) a deal with the Chinese whereby the Chinese would take power from China Light and Power in return for coal. It was understood that China was short of power and might look favourably on this. I pointed out that China may well be short of power but as far as I know they did not have a national grid and unless the shortage was in Kwantung then the Chinese might not be interested.

3.

Mr Bird said that it was necessary to offer a price within 20% of the price which Japan could offer and only by employing such means as stated above could the DOT hope to bring the price within 10% of the Japanese price.

4. I pointed out to Mr Bird that many technical projections of the output and price of the product of the new plant would have to be made and of China's needs before any negotiations with the Chinese could be considered. I suggested that after he had obtained his projections and had prepared a draft brief for his Minister and PUS then we would be happy to look at the draft and comment as necessary.

Portf

ES

T Duffy

24 March 1977

cc: Mr Milton (HKD)

T

CONFIDENTIAL

Hong Kong Department.