TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 184

A) A WHOLE OR PART EQUITY POSITION BY THE SUPPLIERS

(B) THE STATION TO BE BUILT BY CEGB BOTH AS CONTRACTORS AND EQUITY

HOLDERS IN WHOLE OR IN PART (IN OTHER WORDS THAT CEGB SHOULD BUILD DRAX II, FOR THE REASONS IN THE CPRS REPORT, IN HONG KONG RATHER THAN YORKSHIRE)

(C) THE PRICE TO BE PAID IN WHOLE OR IN PART ON A HIRE PURCHASE

SYSTEM, E.G. AS A PRECENTAGE OF UNITS OF ELECTRICITY SOLD.

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(D) TO NEGOTIATE A TRIANGULAR PACKAGE INVOLVING: SALE OF THE POWER STATION TO CHINA LIGHT AND POWER (OR SOME NEW HONG KONG COMPANY): A CONTRACT FOR THE SUPPLY OF COAL FROM CHINA: AND THE OFF-SETTING OF THE PRICE OF THE COAL AGAINST THE SUPPLY OF BRITISH MINING EQUIPMENT TO CHINA.

3. I HAVE WRITTEN TO HM AMBASSADOR, PEKING, ABOUT THE PRACTICABILITY

OF ATTEMPTING 2(D) IN PRESENT CIRCUMSTANCES, AT ANY RATE FOR THE FIRST 350 MW SET WHICH MUST BE ORDERED BEFORE THE END OF THE YEAR

X (COPY OF LETTER SENT TO YOU BY BAG).

•

BUT I AM NOT SO MUCH CONCERNED IN THIS TELEGRAM WITH THE FEASIBILITY

OF ANY OF THE IDEAS IN PARA. 2, BUT RATHER TO MAKE SURE YOU APPRECIATE HOW SIR LAWRENCE SEES HIS PROBLEM, AND THE SORT OF WAY

HE HOPES YOU WILL BE ABLE TO SOLVE IT IN THE MUTUAL INTEREST.

4. IN ADDITION TO THE IDEAS IN PARA 2. SIR LAWRENCE ALSO SUGGESTED

A COMPOSITE PLANT FOR PRODUCTION OF BOTH ELECTRICITY AND DESALINATE WATER. THIS IS A NON-STARTER BECAUSE THE TIMING OF DECISIONS ON THE TWO PLANTS DO NOT COINCIDE, AND OUR CONSULTANTS REPORT DESALINATION WILL NOT BE AVAILABLE FOR ABOUT 4 MONTHS. THIS WILL ADVISE WHETHER A THERMAL OR REVERSE OSMOSIS SYSTEM WOULD BE PREFERABLE, AND IF THE FORMER WHETHER OR NOT THERE WOULD BE ADVANTA IN COUPLING IT WITH A POWER STATION, THOUGH CONCEIVABLY THIS IDEA MIGHT BE APPLICABLE TO THE SECOND SET, IT IS NOT RELEVANT TO THE PRESENT PROBLEM.

MACLEHOSE

Mr Macdonald IC for advice & draft reply ASAP PLEAS Aur Bullock Mr Havelock Mr hippitt Mr Robert CRE4 for clark ps/Mr Williams froinfo.

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