TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 129

03 BTC HỒNG KÔNG

GRS 450

RECESTRO TI EPOETST NO. 51

SOLA

DR OFFICER

INCES

PA

REY Action Teten

DESKBY 050100Z

CYPHER CAT A

FM DTI 041849Z

CONFIDENTIAL.

DESKBY 05010OZ

HITTED.

таго,

puso

TO IMMEDIATE BTC HONG KONG TELEGRAM NUMBER INDUS 185 OF 4 SEPTEMBER.

FOR MARCH FROM THORNTON.

GAS TURBINES.

1. } SPOKE SOME DAYS AGO TO RIZK (GEC) ABOUT THE CASTLE PEAK GAS TURBINES. HE WAS EVIDENTLY DISPLEASED WITH CLP'S NEGOTIATING TACTICS ALLEGING THEY HAD CONSTANTLY REOPENED ISSUES WHICH HAD APPARENTLY BEEN SETTLED, AND HAD UNREASONABLY FORCED YET MORE CONCESSIONS OUT OF GEC IN THE LAST ROUND OF NEGOTIATIONS. (WE ARE AWARE THAT CLP'S VIEWS ARE EQUAL AND OPPOSITE). NONETHELESS RIZK BELIEVED THE BUSINESS WAS NOW CONCLUDED AND THAT A CONTRACT WOULD SHORTLY (MAY BY NOW HAVE BEEN?) BE SIGNED. THE BUSINESS WAS NOW BRINGING GEC QUOTE LESS THAN NOTHING UNQUOTE AND WAS WORTHWHILE ONLY BECAUSE OF THE CONSIDERABLE OPPORTUNITIES FOR SUBSEQUENT GAS TURBINE SALES,

2. ON THE SUBSEQUENT GAS TURBINES, RIZK REPORTED THAT TO HIS GREAT DISAPPOINTMENT CLP INTENDED TO PUT THESE FOUR, WITH AN OPTION ON A FURTHER TWO - OUT TO INTERNATIONAL TENDER FOR DECISION BY THE END OF DECEMBER 1978. THIS DID NOT GIVE AN OPPORTUNITY FOR THE GEC

SETS TO PROVE THEIR WORTH, THOUGH GEC WOULD NONETHELESS DO THEIR BEST TO GET THE BUSINESS.

3.

MEANWHILE ROLLS-ROYCE HAVE ONCE MORE COMPLAINED TO US AT THE OPPORTUNITIES WE HAVE AFFORDED TO GEC GAS TURBINES IN HONG KONG AT THEIR EXPENSE.

4. I HAVE DISCUSSED THIS WITH HAVELOCK. IF THE POSITION IS AS AT PARA 2 ABOVE, IT IS EVIDENT THAT GEC NO LONGER HAVE MUCH IF ANYTHING OF AN INSIDE TRACK, AND WE SHOULD DO OUR BEST TO MAXIMISE THE PROSPECTS OF THE BUSINESS GOING TO A UK MANUFACTURER. THIS MEANS BRINGING IN ROLLS ROYCE AND/OR JOHN BROWN. BENJAMIN HAS REPORTED THAT YOU HAVE MENTIONED THE POSSIBILITY TO SIR PETER THORNTON (RR) FOLLOWING YOUR OWN FEEDBACK FROM CLP.

5. WE SHOULD BE GRATEFUL FOR YOUR CONFIRMATION OF AND COMMENTS ON THE POSITION, SO THAT WE CAN GET THE MANUFACTURERS MOVING. (YOU WILL APPRECIATE MY RELUCTANCE TO ALERT ROLLS ROYCE ON INFORMATION SUPPLIED IN CONFIDENCE BY RIZK).

6. ABOVE ALL, HOWEVER, WE SHOULD BE GLAD IF YOU COULD EXPLORE WHETHER CLP MIGHT NOT BE CONTENT TO PROCEED ON THE BASIS NOT OF A FULL INTERNATIONAL TENDER BUT OF A TENDER FROM UK MANUFACTURERS ONLY. THIS OFFERS THE RANGE OF GEC, THE LIGHTWEIGHT AND AERO- DERIVED TECHNOLOGY OF ROLLS ROYCE: AND THE G E (AMERICA) TECHNOLOGY OF JOHN BROWN. YOU MIGHT AS A FALL-BACK HAVE TO EXPLORE WHETHER A SWEETNER IN THE FORM OF BEI SERVICES WOULD BE NEEDED TO MAKE THIS WAY OF PROCEEDING ACCEPTABLE. BUT YOU CAN NOT IMPLY THAT THEY COULD DEFINITELY BE PROVIDED - WE SHOULD HAVE TO EXPLORE HERE IF THE NEED AROSE.

7. IF YOU JUDGE THAT ONLY STONES COULD COVER THE PROPOSAL ABOVE WE MIGHT BE ABLE TO PUT IT TO HIM IF, AS WE HAVE SUGGESTED TO HIM BY LETTER, WE CAN SEE HIM NEXT WEEK IN HARROGATE. ON THE OTHER HAND IT MAY BE TOO LATE ALREADY.

8.

TRANSMISSION SYSTEM. COULD YOU CONFIRM STONES' DATE (AND TIME) OF DEPARTURE FROM THE UK, IF YOU KNOW THEM, SINCE LIPPITT WOULD LIKE TO SEE HIM AS HE PASSES THROUGH LONDON, WHICH HE PRESUMABLY DOES SOMETIME AFTER THE 15TH? ALSO ANYTHING YOU THINK WE SHOULD KNOW BEFORE SEEING HIM OURSELVES.

NNNN