GRS 850
CONFIDENTIAL
DEBY 140100Z
FM D T I 131655Z NOV 78
1 L.ST
TO IMMEDIATE BRITISH TRADE COMMISSION HONG KONG
TELNO INDUS 292 OF 13 NOVEMBER
FOR THORNTON FROM KESTEN,
HKKI64/!.
300
HAGGD
UNITS 3 AND 4 LETTERS OF INTENT.
MB
YOUR INDUS 190: REFERS.
See 307
I HAVE SPOKEN TO CAMERON ECGD WHO ADVISES THAT HE HAS TELEXED COMMENTS TO BIRCH DIRECT. I HAVE NOT AS YET SEEN THEM BUT I AM TOLD THEY HAVE NO OBJECTIONS BEYOND THOSE RAISED BY BIRCH.
2. GEC'S COMMENTS FOLLOW:
QUOTE.
REF MR THORNTON'S TELEX OF 10 NOVEMBER (INDUS 190) APPRECIATE THE COMMENTS MADE IN PARAGRAPH 1 AND HAVE THEREFORE CONFINED OUR FOLLOWING PRELIMINARY COMMENTS TO SIGNIFICANT POINTS:-
3. DRAFT LETTER TO SIR LAWRENCE KADOOR IE - I HAVE ALREADY COMMENTED TO MR THORNTON ON PARAGRAPH 2 WHICH REQUIRES US TO PREPARE AND UP-DATED PRICE. A NOTE WAS PREPARED AND HANDED TO MR ROBERTS SETTING OUT AN ALTERNATIVE PARAGRAPH AND DETAILS OF THE REASONS WHY WE CONSIDER THIS TO BE NECESSARY. MR ROBERTS INTENDED TO TELEX THIS INFORMATION TO DAVID GEMMILL IN HONG KONG AND I PRESUME THAT YOU NOW HAVE A COPY OF THIS TELEX. YOU WILL APPRECIATE FROM EARLIER CORRESPONDENCE THAT THE CONCEPT OF AN UP-DATED PRICE, IF THIS IS REALLY MEANT TO IMPLY A NEW PRICE LEVEL FOR THE CONTRACT, IS NEITHER IN OUR INTEREST NOR KESCO'S INTEREST. INDEED, I HAD A BRIEF DISCUSSION WITH ECGD COST ESCALATION DEPARTMENT THIS MORNING FROM WHICH IT WAS CLEAR THAT THEY WOULD NOT PROVIDE COST ESCALATION SUPPORT FOR THE PERIOD FROM JUNE 1977 TO THE DATE OF SUCH AN UP-DATED PRICE AND WOULD ONLY PROVIDE SUPPORT FOR COST ESCALATION SUBSEQUENT TO THE NEW PRICE BEING ESTABLISHED. EVEN THOUGH THIS WOULD BE BASED ON NEW PRICE LEVELS THEIR SUPPORT WOULD, AS A CONSEQUENCE, BE REDUCED. YOU WILL SEE FROM OUR EARLIER TELEXES THAT WE ARE, OF COURSE, PREPARED TO GIVE AN INDICATION ON COST ESCALATION AT THE TIME THE CONTRACT SUPPLEMENT IS BEING CONSIDERED SO THAT SOME ASSESSMENT CAN BE MADE IN RELATION TO INTERNATIONAL COMPETITION.
4. IN ADDITION TO THE FOREGOING, PARAGRAPH 4(C) OF THE DRAFT LETTER
A MAN CA
CHUNG TUr Barns IN THE SQUARE
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