TNAG-0841-FCO40-1050-Visit-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-Chi-1979 — Page 137

CONFIDENTIAL #3

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If the three Drax 'B' 660 mw units were commissioned

at Tap Shek Kok in 1983/84/85, Sir Lawrence said

that CLP would be in a position to export to China

from 1,000 to 1,600 mw on a continuous basis.

He said this would have a significant impact on

China's power system, since it would double the

present capacity of Kwangtung Province.

12.

In support of his proposal, Sir Lawrence

postulated that if the transfer of the Drax 'B'

units (or some equivalent units) to Tap Shek Kok

were presented to the Chinese as a gesture

towards their 'Four Modernisations' programme, it

would assist in cementing the good relationship

existing between Hong Kong and China; and that at

the same time UK industry would be benefitted in

a number of ways.

13.

As regards financial arrangements,

Sir Lawrence suggested that the security of

Hong Kong vis-a-vis China would make the financial

risk attached to his proposal more acceptable

than the risk that would be involved in setting

up a power station in China. He recognised that

the cost involved in his proposal was considerable,

but he said preliminary feelers had indicated

that finance would be available against a long-term

supply agreement guaranteed by the Chinese

Government.