TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 26

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CONFIDENTIAL

TO IMMEDIATE DO I TELNO INDUS 143 OF 5 OCTOBER 1978.

FOR HAVELOCK FROM THORNTON.

CASTLE PEAK SUBSTATION.

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1. FURTHER TO MY INDUS 138, I HAVE DISCUSSED UPTODATE POSITION WITH PEARSON (GEC TURBINE GENERATORS). FOLLOWING IS FOR INFORMATION

ONLY: GEC ARE NOT ASKING US TO ANYTHING.

2. PEARSON HAS PASSED TO CLP THE PRICE INFORMATION DESCRIBED IN MY TUR, TOGETHER WITH A LETTER UNDERTAKING THAT GEC WILL MAINTAIN CONTRACT DELIVERY DATES FOR FIRST FOUR BAYS (AND A REASONABLE DATE FOR THE LAST) PROVIDED A VARIATION ORDER COVERING

THE EQUIPMENT IS SIGNED BY 20 OCTOBER.

3. IN DISCUSSION, CLP HAVE BEEN PRESSING TO ESTABLISH WHETHER

(A) INCLUSION OF REYRCLLE HAS CHANGED PRICE AND (B) WHETHER GEC SWITCHGEAR HAVE CHECKED EQUIPMENT IN NEW SCOPE OF SUPPLY FOR WORLD PRICE COMPETITIVENESS.

4. ON (A) BALDWIN WAS ABLE TO GIVE REASONABLE ASSURANCES, THOUGH

HE HAS NOW TO NEGOTIATE WITH REYROLLE TO ENSURE THAT IF UK SCOPE IS BROUGHT BACK TO ORIGINAL FOUR BAYS (SEE PARA 8 BELOW) THE GEC BASE PRICE WILL NOT BE EXCEEDED BY THE COMBINATION (SCOPE WHEN REYROLLE BROUGHT IN STOOD AT FIVE).

5. ON (B) GEC ADMITTED NO SPECIFIC STUDY OF THIS NEW PART HAD BEEN UNDERTAKEN, THOUGH THE PRICING WAS ENTIRELY CONSISTENT WITH

BASE OFFER.

6. BROOKS THEN SAID THAT CLP HAD PREPARED AN ENQUIRY ON THE BASIS OF THE ADDITIONAL SCOPE OF SUPPLY, AND HAD HAD A PRICE IN

FROM AN EXPERIENCED MANUFACTURER (POSSIBLY BROWN BOVERI OR MITSUBISHI): HE MAINTAINED THAT THE UK (REYROLLE) SF6 TRUNKING

WAS FIVE TIMES (SIC) THE PRICE IN THAT OFFER, AND THAT OTHER UK