TNAG-0766-FCO40-970-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 110

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v The British Government was particularly concerned that

UK companies obtain this order because of the prospect of the apply of coal for the power station from the

Peoples Republic of China. In view of the UK's responsibilities for Hong Kong, and in view of the questions which are already being asked about the end of the "lease" in 1997, the supply of coal from China is regarded as important to

the UK. On their recent visit to London, the Chinese Ministerial delegation discussed this issue with the British Government;

The proposals which we put to CLP/EE in Hong Kong included the provision of certain technical services from the CEGB eg advice to CLP/EE on the technical aspects of the British designs; advice on site evaluation in Hong Kong; surveillance of construction in the UK; operator training; secondment of CEGB staff to help CLP/EE operate a power station using coal (all its other power station are oil fired). We have not defined exactly the services to be provided and these will be the subject of further discussion with CLP/EE. For your information, Ministers have approved expenditure between now and 1984 of up to £5m at 1977 prices;

vii We are in no doubt that the prospective provision of

CEGB services has played an essential part in the success of our negotiations in Hong Kong. First, the CEGB can help CLP/Exxon where it is weakest. Secondly as a nationalised industry it provides a governmental interest in Hong Kong. Thirdly the offer of the provision of the services without charge was influential in persuading CLP/EE that the British

Our proposals were internationally competitive in price. proposals were put to an independent firm of consultants for advice: their best estimate was that the CEGB services were worth £9m to CLP/Exxon. As the contract has not yet been signed, we are of course anxious not to make known our own estimate at this stage;

viii We propose using the powers available under Section 7 of the

Industry Act 1972 to meet the costs of the CEGB.

2 The Hong Kong interest, and GEC in the UK, have already had several press enquiries and we expect that the Letter of Intent will have to be given publicity within the next week by a

Ministers simultaneous announcement in Hong Kong and in London. will wish to see considerable publicity given to the Government's involvement. If pressed by journalists we propose saying that we had not sought formal approval from the EEC for the provision