TNAG-0638-FCO40-786-Supplies-of-electricity-for-Hong-Kong-1977 — Page 30

GR 355

IMMEDIATE

PHER/CAT A

FM BTC HONG KONG 080845Z

CONFIDENTIAL

IN

HKK 164/1.

P.A

(267

CONFIDENTIAL

TO IMMEDIATE F.C.O TELNO.BTC 128 OF 8 DECEMBER 77,

AND TO IMMEDIATE PEKING,

INFO D.T. (FOR CRE4 AND 1.C.2).

YOUR TELNO.536: HONG KONG POWER STATION.

1. WE SHARE YOUR DOUBTS ABOUT SUCH A FULL AND SPECIFIC STATEMENT.

BUT EMRYS DAVIES (NOW IN HONG KONG) WHO WAS PRESENT WHEN LI CHIANG

SAW THE SECRETARY OF STATE FOR TRADE INFORMS ME THAT LI CHIANG

STATED IN DEFINITE TERMS THAT CHINA WAS WILLING TO SUPPLY COAL

FOR THE HONG KONG POWER STATION.

2. UNTIL DETAILS ARE WORKED OUT I DO NOT THINK WE SHOULD REFER,

IN THE POWER STATION CONTEXT, TO A SWOP ARRANGEMENT INVOLVING

U.K COAL MINING MACHINERY. HOWEVER, IT WOULD BE A HELP TO CLP

IN THEIR PUBLIC PRESENTATION OF THE POWER STATION DEAL IN HONG

KONG, IF WE COULD INCLUDE A REFERENCE TO CHINESE INVOLVEMENT. I, THEREFORE, SUGGEST THE FOLLOWING:-

}

''SUBSTANTIAL QUANTITIES OF COAL WILL BE NEEDED FOR THE NEW

POWER STATION. CLP/PEPCO ESTIMATE THAT THEY WILL REQUIRE

SOME THREE AND ONE HALF MILLION TONS PER YEAR BY THE MID-

1980'S. AS PART OF THEIR CO-ORDINATION OF PROPOSALS FOR THE

POWER STATION, H.M.G HAS, THEREFORE, BEEN DISCUSSING WITH ·

THE CHINESE GOVERNMENT AN ARRANGEMENT WHEREBY CHINESE COAL

MIGHT BE SUPPLIED FOR THE NEW POWER STATION''.

3. DAVIES'S INFORMATION (YOUR PARA.3) COMES FROM LORD NELSON

WHO SEEMED TO THINK THAT THIS WAS A GOOD REASON FOR KEEPING

QUIET AT THIS STAGE ABOUT THE POSSIBILITY OF COAL FROM CHINA.

WHILE IT IS TRUE THAT EXXON, WHO WILL HAVE A SIXTY PERCENT SHAREHOLDING IN THE NEW POWER STATION COMPANY, WILL WISH TO

BID FOR THE SUPPLY OF COAL, CLP DO NOT WISH TO BE TIED TO

ONE SOURCE AND KADOORIE IS PARTICULARLY KEEN TO INVOLVE THE

CHINESE.

14.

CONFIDENTIAL

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