TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 114

CONFIDENTIAL

HONG KONG POWER STATION PROJECT

Note of a meeting held in Room 703, 1 Victoria Street on Wednesday 18 May at 5.00 pm

Mr Lippitt (in the chair)

Those present:

Mr Elliott

ECGD

Mr Jackson

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Mr Stewart FCO

Mr Milton

Mr Baker

Mr Bryant

Mr Morphet Mr Havelock Mr Battersby Mr Macdonald Mr Moulson

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Mr Lippitt reported that during his recent discussions with GEC they had indicated that they were not prepared.to take on sole responsibility for a complete package in respect of this project. The purpose of this meeting was therefore to discuss how the main organisations likely to be involved could be brought together to form a consortium.

2 In discussion the following points were made:

(i)

NEB

Mr Battersby said that while the NEB would be able in principle to participate in an overseas venture of this kind, the Board's inability to match any financial stake with management expertise would inhibit the extent of any shareholding which the Board might be prepared to take in a new company. He thought that the Board would not wish to take on a majority holding, their normal policy being to aim for between 20 and 50 per cent. He thought that the Board. would, however, consider an equity stake within this order of magnitude if they could commission someone else to act as project managers, perhaps as had been suggested, the CEGB. It was agreed that in view of the problems inherent in any NEB participation no approach should be made to the Board until a clearer view had been formed of the kind of part which NEE might be expected to play.

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(ii)

CEGB

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Mr Morphet said that he thought the CEGB would be willing to act as project managers for this venture they had the expertise with their consultancy arm, British Electric International and would have the spare capacity, even if Drax B was ordered. However, the CEGB's legal position with regard to their involvement in activities overseas was not clear. He could not say how they would want to interpret their own authority but agreed to pursue informally with