TNAG-1158-FCO40-1438-Visit-by-Margaret-Thatcher--UK-Prime-Minister--to-Hong-Kong--1982 — Page 131

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Line to Take

Welcome NEI Projects' involvement in Indian super thermal power station project and hope progress can be maintained towards securing the

contract. Stress importance of major export projects to UK industry.

() Management of Export Contracts

the

8. However, past record of the NEI group both in competing for overseas power

generation contracts and managing these where won has been disappointing.

Despite concerted HMG support, the ineffective pursuit of export business

by NEI, and particularly NEI Parsons, has undoubtedly weakened this

company's international reputation. GEC's record of overseas contracts won in this field since 1975 (11,300MW) contrasts strongly with NEI's 1,600MW.

NEI argue that they face a Government bias towards their rival, seen in the

nomination of GEC for the Hong Kong contracts. In response, the Departments

have made clear to NEI their long-held wish to secure a significant export

contract for NEI. But the fundamental issue remains the management and

presentational problems of the company. The Department of Industry has in

the past encouraged the company to tackle these problems and may shortly embark on a further effort 7.

9.

CONFIDENTIAL

A case in point has been the Sudan Power III complex. In the absence of any

competition, NEI Projects were awarded the turnkey contract for the ODA

funded £50,000,000 Khartoum North power station. Severe inadequacies have

appeared in NEI's project management with the result that the company is 9 months late in a 27 month project timetable. ODA have recently pressed,

at very senior NEI level, the crucial need to remedy this situation given

the serious political, financial, and commercial damage which may otherwise

result to UK industry generally and to NEI who have yet to establish a

track-record in projects of this type.

Line to Take

(1) Express HMG's concern at the group's overall lack of success in winning

major power plant export orders.

a major success.

Repeat HMG's wish to help NEI Parson score

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