TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 195

HOFO #21/15

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TO PRIORITY D C T TELEGRAM NO CREDA 29 OF 15 FEBRUARY AND TO PRICRITY E C G D.

PERSONAL FOR BRYANT (OPG) AND FOR KEMP (E C G D) FROM KINNEAR.

NEW POWER STATION FOR HONG KONG.

AS A RESULT OF DISCUSSIONS BETWEEN HARRY JACKSON OF GEC AND MEMBERS OF THE CHINA LIGHT AND POWER COMPANY'S BOARD OVER THE LAST FEW DAYS, JACKSON NOW HOPES TO BE ABLE TO PUT A PROPOSAL TO C L P WHICH WILL FORM THE BASIS OF A NEGOTIATED CONTRACT. THIS, ESSENTIALLY WILL BE TO SELL C L P TWO OF THE 300MW GENERATORS ORDERED FOR KILROOT IN NORTHERN IRELAND, BUT NOW SURPLUS TO IMMEDIATE REQUIREMENTS.

2. JACKSON SAYS THAT WILL SUIT SIR LAWRENCE KADOORIE AND SIR SIDNEY GORDON FOR A NUMBER OF REASONS. FIRST, IT WILL ENABLE REQUIREMENTS UP TO 1983 TO BE MET BY AN EXTENTION OF THE EXISTING POWER STATION AT TSING YI. A NEW STATION WILL REQUIRE A NEW COMPANY TO BE FORMED, AND THIS IS DEPENDENT ON A NEW SCHEME OF CONTROL BEING AGREED WITH THE GOVERNMENT WHICH IS UNLIKELY BEFORE THE END OF THIS YEAR AT THE EARLIEST. BOTH SIR LAWRENCE AND SIR SIDNEY ARE CONCERNED ABOUT ENTERING INTO THE MAJOR COMMITMENTS INVOLVED IN BUILDING A NEW POWER STATION BEFORE HONG KONG'S POLITICAL FUTURE IS MORE CLEARLY DEFINED: AN EXTENTION TO TSING YI WILL PROVIDE A BREATHING SPACE. FINALLY, THE 1974 FRICE FOR THE 300MW SETS WAS ESTABLISHED BY COMPETITIVE TENDER: THIS WILL GIVE C L P THE NECESSARY PROTECTION AGAINST ANY POSSIBLE PUBLIC CRITICISM OF A NEGOTIATED CONTRACT. FROM WHAT I KNOW OF SIR LAWRENCE AND SIR SIDNEY'S VIEWS, ALL. THIS MAKES SENSE.

3. JACKSON WILL BE BACK IN LONDON IN THE NEXT DAY OR TWO AND WILL CONTACT YOU ON HIS RETURN. HE DOES NOT WISH ANY ACTION TO BE TAKEN ON THIS TELEGRAM UNTIL HE HAS HAD THE OPPORTUNITY TO DISCUSS THE MATTER WITH YOU IN DETAIL. PROVIDED THERE ARE NO SNAGS, THE INTENTION IS THAT G E C SHOULD PUT FORWARD A PACKAGE INCLUDING FINANCE. THERE IS NO REASON, HOWEVER, WHY KEMP SHOULD NOT GO AHEAD WITH THE ARRANGEMENT TO MEET AND TALK IN GENERAL TERMS TO BISCHOFF OF SCHRODERS AND CHARTERED WHEN HE PASSES THROUGH HERE ON 26 FEBRUARY.

KINNEAR

NNNN

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