TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 164

CONFIDENTIAL

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HONG KONG POWER STATION PROJECT

18h-

(59)

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Note of a meeting held in Room 703, 1 Victoria Street? IN London SW1 on Friday 13 May at 4.30 pm.

Those present:

Mr AJ Lippitt (in the chair) Mr H Jackson/GEC

Mr N Scott

Mr A J Havelock

Mr R A Hewes

Mr A J Macdonald)

R*

23 MAY 1977

HKK 16+ /1

Department of Industry

5 16/5

Mr Lippitt invited the GEC representatives to indicate what progress they had made in discussions with Lazards in respect of the Hong Kong power station project.

2

Mr Jackson said that GEC had had useful discussions with Lord Kindersley and Mr Gemmell at Lazards. GEC recognised that British industry's best hope of winning the power station contract would be to offer to implement a ten year energy programme for Hong Kong, including the power station and pump storage scheme new port facilities and, ultimately, the proposed desalination plant. Nevertheless, the GFC/Lazard discussions had been constrained by two factors. First, GEC were convinced that Sir Lawrence Kadoorie was looking more to the British Government than to GEC for some form of response to the various possibilities which he had put forward six weeks ago. Secondly, GEC did not regard it as consistent with the interests of its own shareholders to take responsibility for the whole package to be presented to China Light and Power (CLP). In the light of these points GEC considered that it would be appropriate for the CEGB, if the statutory position allowed it, to be the lead contractors.

3 After a general discussion of the various ways in which British contracts could be put to CLP, Mr Lippitt said that there appeared to be three possibilities:

(a)

(b)

(c)

A single vehicle could be created, in which GEC would play an important part, which would present an overall package to CLP;

The contract could be divided up with

GEC providing a turnkey price for the power station and with separate arrangements being made by other companies for the pump storage and desalination aspects of the contract;

UK companies could submit tenders for individual items quite separately from each other (in which case UK companies might have a considerable problem in proving that their prices were internationally competitive).

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