TNAG-0769-FCO40-973-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 133

BY NO. 51

DO BTC HONG KONG

GR 345

DESKBY 25010OZ

HKK 164/1

RECEIVED A

DEAN OFFICEN

INDEX

No

CYPHER CAT A

See (289

RE

Action Tee

RY

281

02

FM D T I 241913Z

CONFIDENTIAL

DESKBY 25010OZ

оэт

ECON

TO IMMEDIATE BRITISH TRADE COMMISSION HONG KONG TELNO INDUS 272 OF 24 OCTOBER

FOR THORNTON FROM KESTEN.

FOREIGN CONTENT OF TRANSMISSION SYSTEM.

f

1. ECGD HAVE WRITTEN TO TREASURY TO TELL THEM THAT THEY HAVE AGREED TO FINANCE THE SWISS SURGE DIVERTERS AND TO ASK TREASURY TO CONSIDER AGREEING TO ALLOW THE INCLUSION OF ITALIAN STEEL WORKS WORTH POUNDS STERLING 17 MILLION, WHICH WOULD TAKE POUNDS STERLING 3 MILLION OFF THE PACKAGE PRICE, WHILE CONTINUING TO OFFER SUPPORT FOR LOCAL COSTS UP TO 15 PER CENT OF THE TOTAL NON-UK ELEMENT.

2. AFTER CONSULTING NUTTALL OF K AND D, WITHOUT EXPLAINING MY REASON FOR ENQUIRING, I HAVE TOLD BIRCH THAT I BELIEVE ECGD HAVE GOT THIS WRONG. AS I UNDERSTAND IT THE TOTAL FOR THE O.H.L. IS POUNDS STERLING 20 PLUS MILLION OF WHICH POUNDS STERLING 8 MILLION REPRESENTS THE COST OF UK STEELWORK. AN ITALIAN PRICE FOR THIS WOULD BE POUNDS STERLING 5 POINT 5 MILLION WHILE THE CHEAPEST K AND D FOUND WAS A SPANISH QUOTE OF POUNDS STERLING 25 POINT 9 MILLION. (ECGD WOULD FIND THE ITALIAN STEEL EASIER TO BEAR PRESENTATIONALLY). THE SAVINGS TO BE GAINED FROM USING FRENCH INSULATORS AND SPANISH CONDUCTORS WOULD BE A FURTHER POUNDS STERLING O POINT 94 MILLION 1.E. A FOREIGN COST OF POUNDS STERLING 4 POINT 26 MILLION AGAINST A TOTAL UK COST OF POUNDS STERLING

5 POINT 2 MILLION. THIS WOULD RESULT IN A FOREIGN ELEMENT OF POUNDS STERLING 13 POINT 4 MILLION (INCLUDING SURGE DIVERTERS) AND A MAXIMUM POTENTIAL SAVING OF POUNDS STERLING 3 POINT 5 MILLION FROM THE PACKAGE PRICE.

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