PP HONG KONG
GR 420
HKK 64 ||
1
W Questill
'234
TRED (2) BID
PUSD (2)
129
CYPHER/CAT A
FM D T 1 08153AZ
CONFIDENTIAL
No of
TO PRIORITY BTC HONG KONG TELNO CREDA 339 OF 8 NOVEMBER.
YOUR CREDA 252: POWER STATION PROJECT.
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CLP/PEPCO NOW APPEAR TO BE RAISING WITH YOU MATTERS THAT
YOU SHOULD HAVE LITTLE DIFFICULTY IN REBUTTING ROBUSTLY.
IT MAY
BE RELEVANT THAT WE HAVE HAD VERY CONFIDENTIAL HINT THAT ELECTRO-
WATT VIEW IS DISTINCTLY FAVOURABLE TO US. THIS COULD OF COURSE
CHANGE BY TIME REPORT IS COMPLETED BUT IT IS POSSIBLE THAT CLP/
PEPCO SENSE THEY ARE IN SOME TACTICAL DIFFICULTY AND ARE CASTING
AROUND FOR OTHER ISSUES WITH WHICH TO TEST OUR POSITION.
2.
ON SPECIFIC POINTS MENTIONED BY SIR LAWRENCE KADOORIE:
236
(A) IS NOT RELEVANT. OUR FORMAL FINANCIAL PROPOSALS SPECIFI-
CALLY CATERED FOR POSSIBILITY OF EXCHANGE RATE CHANGES. THAT
IS WHY WE INCLUDED QUOTE ALTERNATIVE ONE UNQUOTE LOANS
DENOMINATED IN HONG KONG DOLLARS WITH US DOLLAR CONTRACT PRICE. ARRANGEMENTS FOR THIS HAS BEEN EXPLAINED IN DETAIL BY GEMMILL TO DEWE MATTHEWS (SCHRODER WAGG).
(B) IS A MATTER ON WHICH HMG'S VIEWS ARE WELL KNOWN. WE REMAIN HOPEFUL THAT CLP/PEPCO WILL NEVERTHELESS RECOGNISE THE
ATTRACTIONS OF THE BRITISH PACKAGE.
AS FOR (C), SHIPBUILDING INTERVEOEION FUND WAS SET UP TO DEAL
WITH CRISIS IN SHIPBUILDING INDUSTRY WHICH DEVELOPED AS RESULT
OF SEVERE OVER CAPACITY THROUGHOUT WORLD. OTHER COUNTRIES HAVE
ALSO ACTED TO ALLEVIATE PORBLEM BY INTRODUCING SPECIAL SCHEMES TO
HELP INDIGENOUS INDUSTRIES. IN UK THE DIFFICULTY IS EXACERBATED
BY CONCENTRATION OF SHIPBULDING IN AREAS OF HIGH UNEMPLOYMENT
WHERE ALTERNATIVE JOB PROPSPECTS ARE VERY SLIGHT AND BY FACT
THAT SHIPBUILDERS DO NOT HAVE RESOURCES TO SĒRVIVE WITHOUT
ASSISTANCE. THE UK POWER PLANT INDUSTRY IS NOT FACING THE SAME
DEGREE OF DIFFICULTY.
LINE TO TAKE WITH CLP/PEPCO IS THAT WHAT HMG DOES FOR SHIPS
SHOULD NOT REPEAT NOT BE TAKEN AS APPLYING TO BRITISH EXPORTS
GENERALLY. WE DO NOT CONSIDER CIRCUMSTANCES ARE SIMILAR. LIPPITT
EMPHASISED IN HONG KONG THAT HMG HAD SOUGHT TO SATISFY ITSELF
THAT THE BRITISH PACKAGE WAS COMPETITIVE. HE ALSO STRESSED THAT HMG WAS NOT REPEAT NOT PREPARED TO GO FURTHER ON PRICE OF CLP/
PEPCO PACKAGE.
ON SEPARATE MATTER, WE WISH TO PREPARE PROPOSALS FOR NEW
TERRITORIES TRANSMISSION SYSTEM ON MAINLAND. SO THAT WE CAN
PREVARE BUDGETARY PROPOSALS WOULD YOU PLEASE ASK SIR LAWRENCE
KADOORIE TO SUPPLY URGNELTY COPY OF CLP'S DEVELOPMENT PLAN.
MUST BASE OUR PROPOSALS ON THIS
MACDONALD 102.
WE
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