TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 209

PERSONAL & CONFIDENTIAL

7 July, 1978.

3

I hope that you will have received a short telegram letting you know that we managed to retrieve the situation before Benjamin left for the UK last night, even though Sir Lawrence remains disappointed at the apparent lack of progress on counter trading with China. Benjamin has already begun drafting firm proposals to put to the Chinese.

I enclose, for your information, copies of two draft telegrans which I am about to send to London. I also attach copies of some of the references which I think will provide useful background if the subject comes up during your official discussions in London,

I would hope that by the time you go into the FCU I shall have received some positive proposals to put to Sir Lawrence. But if we are still without proper instructions, I should be grateful if you could stress the importance of having something definite to put to him well in advance of his visit to London at the end of this month. If we do not react positively very soon, there is a real danger that he will simply call off the deal and purchase his cual quite separately. This would, of course, lose us a trading opportunity in China but, much more important, it would sour the whole atmosphere for the forthcoming discussions on the sale of the EHV transmission network and units 3 and 4 of the new Castle Peak power station.

Finally, you will note that Sir Lawrence unexpectedly sought our advice on possible forms of joint generating facilities with lonk kong Electric. I have told Benjamin that this is a delicate subject which I shall wish to discuss with David Jeaffreson.

D. M. March

H. E. Sir Murray MacLehose, GBE,

KCMG, KCVO.

PERSONAL & CONFIDENTIAL