TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 117

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

Mr Jackson

ECGD

17

Mr Stewart FCO

Mr Milton

#1

Mr Baker

DOT

Mr Bryant

Mr Morphet

DEn

DOI

11

11

11

Mr Havelock Mr Battersby Mr Macdonald Mr Moulson

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 NEB might be expected to play.

(ii)

CEG B

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