TNAG-0637-FCO40-785-Supplies-of-electricity-for-Hong-Kong-1977 — Page 81

CONFIDENTIAL

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SPEAKING NOTES

1

i

By way of introduction the Prime Minister might:

recall his meeting with Sir Lawrence Kadoorie in March;

ii

iii

enquire about Sir Lawrence's holiday in Geneva;

thank Sir Lawrence for his recent present of

a piece of jade which has been forwarded to No 10.

2 On the power station project the Prime Minister should emphasise that the Government was making a determined efort to prepare an attractive package to put to China Light and Power/PEPCO:

the CEGB was showing a top level commitment to the project. A CEGB team returned from Hong Kong last Thursday after a week of discussion, visits to potential sites on Lan Tau island and visits to CLP/PEPCO's existing power stations. Sir Lawrence told the Minister of State, Mr Williams that CLP/PEPCO had been pleased with progress made during the visit.7 CEGB has been discussing the next steps with the main companies involved.

the main companies have been working hard to produce speciiic proposals. They were well aware that their proposals had to be attractive, both in terms of reliability of equipment and price.

the Department of Industry was pursuing actively with the Treasury, the Bank of England, and ECGD the possibility of arranging the buyer credit facilities in Hong Kong dollars. We recognised the attractions of this entirely novel approach to China Light and Power and, we hoped,

the Hong Kong Government. The next stage would probably involve discussions by the Department and Lazards (who are advising the Department on the financial aspects of the proposals) with the Hong Kong and Shanghai Bank and Mr Haddon Cave (Financial Secretary to the Hong Kong Governor) in Hong Kong.

HMC was pursuing through its Ambassador in Peking the possibility of Chinese coal for the CLP/PEPCO power station. We had roodived some encouraging indications

from the Ambassador last Friday (copy of telegram at Annex A). Nevertheless this still looked a longer term prospect rather than an immediate possibility.