A. J. Macdonald, Esq.. IC 2 Division, Department of Industry,
1 Victoria Street.
CONFIDENTIAL
HKK 164/11
No al
A
(41)
1
31 January, 1978.
See (147)
978
HKK 164))!
1977
HONG KONG KCTRIC.
Would you please refer to my last letter on this subject dated 19 December. I felt inhibited from calling on Hong Kong Electric (HKE) to enquire about the progress of their negotiations until the announcement of GEC's sale to China Light & Power was out of the way. It would have been embarrassing to have had to press for information while ducking all questions about our deal; I could hardly admit that I knew nothing about it!
2. I called on John Peacock on Saturday morning to ask both about their order for a 50MW gas turbine (or 2 x 25MW) and the larger order for the first 2 x 250MW units. Peacock told me that final recommendation on the tenders for the gas turbines which were submitted at the beginning of December will come before him in the course of this week. There are at least seven bidders and at the moment all options are open. He said that he will probably reduce the list to a final three with whom he will then hold further talks. Although there are rumours that the list will be narrowed to Mitsubishi, Alsthom (both represented by HKE shareholding companies er HKE subsidiaries) and John Brown, in theory all three British bidders (GEC, John Brown and Rolls Royce) remain in the hunt. I told Peaceok that I hoped that the fact that Rolls Royce currently lacked a local Hong Kong agent would not be held against them - I assured him that they were prepared to fly here from Singapore at a moments notice. Peacock would not be drawn on the likely selection but in answer to my enquiry said that there were extremely competitive bids from the French (Alsthon), the Germans (Siemens), the Americans (United Technology) and, of course, the Japanese . All in all net a great deal of help!
3. We then turned to the question of the new power station and Peacock said that he had informed Northern Engineering Industries (i.e. Reyralls Parsons) at the end of last week that the order for the first 2 x 250MW turbines would go to Hi tmuhi meri . He said that the decision had been taken at the end of December and that the "Contract Letters" had been drawn up.
CONFIDENTIAL
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