TNAG-0841-FCO40-1050-Visit-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-Chi-1979 — Page 136

CONFIDENTIAL # 2

11.

- 5

(b) The provision of such facilities could be

financed only through barter arrangements

or through compensatory deals. To expect

payment in cash would be totally unrealisitc.

(c) He assumed that UK manufacturers were well

aware of (b) and that thought was being given

to what security could be provided for long-

term loans.

Sir Lawrence proposed, as an alternative

to selling a power station to China, that the three

660 mw generating machines ordered for Drax 'B' power station in the UK (Note 2), should be installed in Hong Kong to supply the KEIB with electricity in bulk (with any spare output being fed into CLP's grid system! The machines would be operated by CLP's proposed new company. As regards a site, he said that KESCO might be able to release the land reserved at

Tap Shek Kok for their station 'B' to the proposed

new company, provided an alternative site could be made available to KESCO in due course (Note 3).

Note 2 Drax 'B' is a new power station in UK which is apparently being constructed before its capacity will actually be required.

Note 3 KESCO is a new generating company owned

jointly by CLP and ESSO, formed to develop two new power stations at Tap Shek Kok, Castle Peak. Work has commenced on station 'A', which will initially house two 350 mw generators purchased from the UK. The new sets are expected to be commissioned in 1982 and 1983.