TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 20

GR 335

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FM BTC HONG KONG 121858Z

CONFIDENTIAL.

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TO IMMEDIATE DO I TELNO INDUS 157 OF 12 OCTOBER 1978.

FOR HAVELCOK, TRANSMISSION SYSTEM.

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Hre Pus) (2)

I SPENT MOST OF YESTERDAY EVENING WITH STONES TO TRY TO GAUGE

HIS POSITION FOLLOWING YOUR LAST VISIT. THERE IS NO DOUBT

THAT YOUR SUCCESSFUL PRESSURE ON CEGB BOARD MEMBERS TO ACCEPT CLP'S WISHES WITH REGARD TO STAFF HAS REMOVED A MAJOR IRRITANT (SEE

MY INDUS 110 OF 22 AUGUST PARAS 5 AND 6).

2. STONES SPENT MOST OF HIS TIME COMPARING THE CO-OPERATION WHICH HE HAD BEEN RECEIVING FROM BARNWOOD ON THE POWER STATION

UNFAVOURABLY WITH THE ATTITUDES OF TOP PEOPLE AT GUILDFORD. I HOPE WE SHALL HAVE NO MORE TROUBLE ON THIS FRONT.

3. STONES REMAINS CONCERNED ABOUT THE WILDER INTERPRETATIONS OF

THE PRICING IN OUR PACKAGE WHICH WERE PROMULGATED DURING HIS ABSENCE (PRINCIPALLY BY DEAN BARRETT) ON THE BASIS OF FIGURES WHICH STONES HIMSELF REGARDS AS CLP'S PRELIMINARY ESTIMATES. HE FEARS THAT OUR PRICE MAY HAVE BEEN DISTORTED BY UNREALISTICALLY

HIGH LOCAL CONSTRUCTION AND ERECTION COSTS. STRICTLY FOR YOUR OWN INFORMATION HE CALCULATES THAT ONLY POUNDS STERLING 2.8 MILLIO OF THE POUNDS STERLING 5.8 MILLION QUOTED FOR PROVISIONAL EXPENDITURE ON TRANSMISSION LINES IN SECTION 4(1) OF VOL 1 OF THE BALFOUR BEATTY OFFER CAN REPRESENT UK HARDWARE. THIS SUGGESTS TO CLP THAT AS MUCH AS 26.5 PERCENT OF OUR PACKAGE PRICE COVERS LOCAL ERECTION COSTS. THIS MAY BE BACK OF ENVELOPE STUFF BUT I BELIEVE THAT STONES WILL TRY TO PERSUADE GOLDSMITH TO PRESENT HIS REPORT TO CLP IN TERMS OF THE PACKAGE BEING REASONABLY COMPETITIVE IN TERMS OF EQUIPMENT BUT WITH CONSIDERABLE

SCOPE FOR SAVINGS IN RESPECT OF LOCAL CONSTRUCTION COSTS.

4. THIS HAS OF COURSE BEEN STONES' ATTITUDE FROM THE BEGINNING

JIR (SEE PARAS 1 3 OF MY INDUS 86 OF 20 JULY

AND PARA 5 OF YOUR LETTER OF 14 AUGUST TO STONES). I SHOULD BE GRATEFUL IF YOU WOULD PROTECT HIS CONFIDENCE BUT THOUGHT YOU WOULD WISH TO HAVE THIS BACKGROUND AS YOU PREPARE FOR NEXT WEEK'S

COMMERCIAL DISCUSSIONS.