ĐÓ BỨC HONG KONG
GR580
DESKBY 090100Z
CYPHER/CAT A
FM DTI 081845Z
CONFIDENTIAL
DESKBY 090100Z
HKK 164/1
RECEIVED PA
YXO. 51
43 5 9973
DAX OFFICE INDEX
No
REGISTRY Action Tarman
+
129
HKOD
TRED(2)
TO IMMEDIATE BTC HONG KONG TELNO INDUS 193 OF 8 SEPTEMBER
FOR MARCH FROM THORNTON
YOUR INDUS 119 AND 121
TRANSMISSION SYSTEM.
for
1. WE HAVE HAD A PRELIMINARY DISCUSSION OF CLP'S REQUEST FOR A PRICE BREAKDOWN WITH BALFOUR BEATTY, AND WITH ALASTAIR MACDONALD HERE (FOR COMPARISON WITH EXPERIENCE ON POWER STATION BID). WE SHALL BE HOLDING A MANAGEMENT STRATEGY MEETING AT 0900 GMT MONDAY 11TH TO DISCUSS FURTHER, PRIOR TO LIPPITT'S RETURN-FROM-LEAVE ROUND-UP ON TUESDAY,
2. AS YOU RIGHTLY IMPLIED, OUR GENERAL LINE REMAINS FIRMLY THAT THE PRICE IS A PACKAGE PRICE AND WILL NOT BE BROKEN INTO CONSTITUENT PARTS. NONETHELESS WE PRIVATELY RECOGNISE THAT SOME LIMITED INFORMATION MAY LEGITIMATELY BE SOUGHT, AND WILL EVENTUALLY NEED TO BE GIVEN, TO HELP CLP IDENTIFY ITS LIKELY LIABILITIES IN FUTURE YEARS UNDER CPA, AND IN TERMS OF EXTRA LENGTHS OF CABLE, OHL ETC. HOWEVER, THE PRINCIPLE IS THAT AS LITTLE INFORMATION AS POSSIBLE SHOULD BE REVEALED IN THE EARLY STAGES, SO THAT THE CLIENT SHOULD BECOME AS COMMITTED AS POSSIBLE TO THE PACKAGE ON THE BASIS OF AS UNDIFFERENTIATED A SINGLE PRICE AS POSSIBLE AT LEAST AS FAR AS LETTER OF INTENT BEFORE THE SIGNIFICANT BREAKDOWN INEVITABLE FOR THE FORMULATION OF CONTRACT TERMS.
3. WE BELIEVE THERE WOULD INDEED BE ADVANTAGE IN YOUR TRYING OUR REACTION ON SIR SIDNEY GORDON, AS FOLLOWS*
(A) THE SINGLE INDIVISIBLE NATURE OF OUR PACKAGE PRICE IS WELL
UNDERSTOOD. YOU CANNOT THEREFORE BE SANGUINE ABOUT THE PROSPECTS OF A PRICE BREAKDOWN BEING GIVEN (AS YOU HAVE ALREADY SAID). GIVEN THE PACKAGE BASIS OF THE OFFER, IT IS UNREALISTIC FOR CLP TO EXPECT IT.
(B) CERTAINLY THE DEPARTMENT CANNOT GIVE INFORMATION IN THIS AREA
IN THE VAGUE AND UNSUPPORTED TERMS OF BARRET'S TELEX. IF CLP HAS SPECIAL REASONS (OTHER THAN THE SIMPLE WISH TO KNOW THE PRICE FOR COMPARISON WITH OTHERS) TO WANT INDIVIDUAL QUESTIONS OF THIS SORT ANSWERED, LET US KNOW THE QUESTIONS, AND THE REASONS.
(C) CLP HAVE ENGAGED ELECTROWATT FOR A FINANCIAL EVALUATION OF OUR
BID. IT IS NOT CONVINCING TO SUGGEST, IF CLP WERE TO, THAT THIS CANNOT BE DONE WITHOUT KNOWING OUR UNIT PRICES. THE COMPARISON CLP NEED 18 WITH THE UK TOTAL PACKAGE PRICE, WHICH ELECTROWATT CAN READILY BUILD UP FROM THEIR OWN ESTIMATES OF THE PRICES OF INDIVIDUAL ITEMS IN THE PACKAGE. ON THE OTHER HAND, WE STAND READY TO GIVE ELECTROWATT/CLP EVERY ASSISTANCE IN IDENTIFYING WHAT ITEMS AND CONSTITUENT PARTS GO INTO THE BID, TO MAKE SURE THEY WILL IN THEIR REPORT BE COMPARING LIKE WITH LIKE.
4. FOR YOUR OWN INFORMATION, THERE MAY BE A TENDENCY FOR BALFOUR BEATTY TO BE READIER TO CONCEDE INFORMATION OF THIS SORT THAN WE ARE AS WAS I UNDERSTAND THE CASE WITH GEC. HOWEVER ODELL HAS EXPRESSED FULL AGREEMENT WITH THE LINE ABOVE.
5. I LEAVE IT TO YOUR DISCRETION WHETHER TO CONVEY OUR PRELIMINARY LINE TO GORDON AS COMING FROM US OR FROM YOUR OWN EXPECTATION OF OUR REACTION. HOWEVER IT WOULD BE VERY HELPFUL TO HAVE HIS REACTION BY 118800Z, FOR OUR MEETING. IN PARTICULAR, IT WOULD HELP TO HAVE SPECIFIC QUESTIONS TO ANSWER (PARA 2 OF OUR INDUS 121). OUR MORE DEFINITIVE REPLY MAY HAVE TO AWAIT LIPPITT'S MEETING ON 12TH, TO BE WITH YOU ON 13TH.
6. (PARA 1 OF YOUR INDUS 121.) HAVELOCK HAS SPOKEN TO YATES (CEGB) ABOUT THE ALLEGATION THAT CEGB MADE SOME PRELIMINARY ESTIMATE OF THE PRICE OF THE PACKAGE. HE IS SURE THAT NO ESTIMATE HAS BEEN OFFERED, FORMALLY OR INFORMALLY. WE SUGGEST THAT YOUR LINE BE THAT YOU ARE CONFIDENT THAT NO ESTIMATE HAS BEEN MADE WITH AUTHORITY BY CEGB: ANY QUOTE BACK OF THE ENVELOPE UNQUOTE FIGURE FROM WHATEVER SOURCE COULD NOT POSSIBLY HAVE ACCOUNTED FOR THE CIRCUMSTANCES OF THE HONG KONG JOB (WHICH INCLUDE EG DIFFICULT TERRAIN AND CROSSING A 132KV SYSTEM WHICH MUST REMAIN ALIVE), AND WOULD THEREFORE BE VALUELESS AS A COMPARISON WITH OUR BID.
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