TNAG-1160-FCO40-1440-Visit-by-Margaret-Thatcher--UK-Prime-Minister--to-Hong-Kong--1982 — Page 22

CONFIDENTIAL

that for CAPCO, are Peninsula Electric Power Co Ltd (PEPCO) and Kowloon

Electricity Supply Co Ltd (KESCO).

UK CONTRACTORS

6.

The main companies involved are GEC Turbine Generators (turbines),

Babcock Power Ltd (boilers), L G Mouchel & Partners (civil design); British

Electricity International (advisory services) and Balfour Beatty (trans-

mission line). CEC are the main contractor.

HMG INVOLVEMENT

7. In 1977 the Chairman of CLP, Sir Lawrence Kadoorie, approached

Mr Callaghan, the then Prime Minister, with the proposition that his company,

with Exxon as a partner, should enter into a negotiated contract with the UK

for the supply of a major power station. The advantages of this method of

contracting were that it was possible to arrange a complete package of hard-

ware and finance approved and presented by HMG; progress was made more quickly

than calling, for international tenders; and CLP were given special access to

CEGB resources. The Department of Industry took the leading role in co-

ordinating the successful presentation of a unique package of proposals from

UK manufacturers, the electricity supply industry and financial institutions.

8. Following the successful negotiations on the 'A' station, Lord Kadoorie

again approached HMG concerning the Castle Peak 'B' contract and a similar

successful package was subsequently presented. The Department of Industry

have been responsible for monitoring on both of these projects and have

established close contacts with both CLP and the UK contractors.

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CONFIDENTIAL