TNAG-1025-FCO40-1275-Visit-by-Lord-Carrington--Secretary-of-State-for-Foreign-and-1981 — Page 125

CONFIDENTIAL

MEETING WITH SIR LAWRENCE KADOORIE: ESSENTIAL FACTS

CASTLE PEAK 'B' POWER STATION

1. In 1977 a British group with DOI support (led by GEC and Babcock)

negotiated contract with Kadoorie's China Light and Power Co (CLP),

and Esso Eastern for Castle Peak 'A' power station. Progress of

construction has been good. Due to this and Kadoorie's strong

pro-British sentiments CLP offered UK group the chance to submit

proposals for construction of a £550 million extension (Castle Peak 'B')

2. UK package co-ordinated by DOI and approved by Ministers. It

involved Government financial support (eg through consulting services).

Negotiations in Hong Kong in February and March. UK offer has been

provisionally accepted, subject to agreement by the Boards of CLP and

Esso Eastern. The Hong Kong Government's approval also required for

CLPS financial proposals which will include electricity tariff arrange-

ments. Final approval should be given during week beginning 23 March,

and it is hoped that Lord Carrington will be able to announce the deal

when he visits Power Station site on 30 March. Draft press announcement

attached (subject to confirmation). Until then the information is

still in confidence.

3. Contract is important for employment in the UK, and represents UK

power plant industry's largest single export order. Prestige from

order will help UK exports to Hong Kong and other regional markets

(especially China). Success will also help our attempts to secure

orders for Guangdong Nuclear Power Station project.

GUANGDONG NUCLEAR PROJECT

4. Please see Brief No 15.

Hong Kong and General Department

March 1981

CONFIDENTIAL