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3. CHAPMAN TOOK NOTE OF THIS CATALOGUE OF COMPLAINTS AND UNDERTOOK

TO REPORT THEM BACK ONCE AGAIN TO HIS AUTHORITIES IN LONDON.

HE UNDERLINED THE IMPORTANCE OF THE PROJECT TO THE BRITISH COMMERCIAL EFFORT IN CHINA IN GENERAL, AND THE COMMITMENT OF GECT G AND HMG TO THE PROJECT. HE ALSO UNDERTOOK TO REPORT BACK THEIR

COMMENTS ABOUT DAVY MORRIS AND TO SEE WHAT MIGHT BE DONE TO IRON THINGS OUT.

4. HO ALSO REFERRED TO THE DTI'S QUOTE OBLIGATION TO MONITOR THE CONTRACT UNQUOTE. GNPJVC WERE UNHAPPY WITH THE DTI'S EFFORT

IN THIS DIRECTION AND DID NOT CONSIDER THE DTI'S POSITION ADEQUATE.. HE SUGGESTED THAT MORE COULD BE DONE, FOR EXAMPLE, BY BRINGING IN CONSULTANTS SUCH AS EWBANK PREECE IN SUPPORT. CHAPMAN ALSO

UNDERTOOK TO REPORT THIS BACK TO THE DTI.

5. HO REFERRED TO DIFFICULTIES WHICH THE JVC HAD BEEN ENCOUNTERING

IN SETTING UP FURTHER COMMERCIAL LOANS FOR THE PROJECT. HE SAID BRITISH BANKS AS WELL AS THOSE IN HONG KONG HAD BEEN EXHIBITING

SOME RELUCTANCE SINCE THE EVENTS OF JUNE. THE HONG KONG BANKS IN PARTICULAR WERE ASCRIBING THEIR RELUCTANCE TO INSTRUCTIONS FROM

THEIR HEAD OFFICES IN BRITAIN. HE WONDERED IF THIS WAS DUE TO ADVICE GIVEN BY THE EMBASSY IN PEKING. CHAPMAN SAID IT WAS FOR THE BANKS TO MAKE THEIR OWN COMMERCIAL ASSESSMENTS OF CHINA'S CREDITWORTHINESS. ALTHOUGH OBVIOUSLY THERE WAS SOME CROSSFLOW OF ECONOMIC INFORMATION, THE EMBASSY DID NOT OFFER SPECIFIC ADVICE OF THIS SORT.

6. CHAPMAN RAISED THE QUESTION OF BOP LOT 23 (PARA 7 OF TUR). SHUM

SAID THAT NEGOTIATIONS WERE STILL UNDER WAY AND TECHNICAL

ASSESSMENTS WERE IN HAND. BABCOCK ENERGY WERE ON THE SHORT LIST.

GNPJVC WERE NOW EXAMINING PURCHASE AND LEASING OPTIONS (WE UNDERSTAND THAT BABCOCK ENERGY DID NOT BID ON A LEASING BASIS) BUT

HAVE YET TO MAKE UP THEIR MIND WHICH ROUTE TO FOLLOW. SHUM ASSURED

CHAPMAN THAT THE FINAL DECISION WOULD BE MADE FAIRLY AND AN

ANNOUNCEMENT IS EXPECTED BY MID-OCTOBER.

IN A SUBSEQUENT DISCUSSION, MANUAEL (GECTG SITE MANAGER) ADMITTED THAT SOME OF THE GNPJVC COMPLAINTS HAD PROBABLY BEEN JUSTIFIED. HOWEVER, GECTG HAD TAKEN STEPS TO RECTIFY THESE AND HAD SUCCEEDED IN KEEPING UP TO SCHEDULE. MUCH OF THE JVC'S CRITICISM WAS EXAGGERATED, ALTHOUGH HE CONCEDED THAT MANAGEMENT PRACTICES FOR EXAMPLE DID NEED SOME ADJUSTMENT. THIS WAS IN HAND,

AND NEW LOCAL ARRANGEMENTS INCLUDING A WORKING GROUP INVOLVING

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