TNAG-0769-FCO40-973-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 59

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CONFIDENTIAL

should withdraw from the package in the face of massive under- how

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cutting on price by unsolicited bids from their European and Japanese competitors. However, after protracted negotiations with the Department's officials, CLP have agreed at this stage to let a contract only for the first substation and to encourage the successful tenderer to subcontract to British suppliers for as much of the station as possible this should reach 25% by value and could be more. In a couple of years the UK manufacturers will then have another opportunity of securing a major part of this business for the remainder of the substations in a negotiated package. My Department will be working closely with them in the intervening period in drawing up their strategy

for such a bid.

The present expectation is that the award of the transmission system to the UK should be announced in Hong Kong on 12 December; my Department will be issuing a press release the same day.

I am copying this minute to the Chief Secretary, Tony Benn,

John Smith and David Owen.

ALAN WILLIAMS

Department of Industry 5 December 1978

CONFIDENTIAL

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