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BRITISH TRADE COMMISSION
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how simply promoting the Scottish power industry would be very beneficial. Babcocks was in a mess and Weirs was not much better: and where would the generators come from? Hence his greater interest in working in and on behalf of a wider UK Inc power generation package.
4. He said that he was still considering how to write to Mr Needham about his own ideas on how he could help. He could not see how, working as an adjunct of the DTI, he would be able to achieve very much. He harked back to how he had put together the Castle Peak A deal. The price differential then between British suppliers and Japanese was some 30 percent. The only way that this could be bridged was by formulating an imaginative overall package. This had eventually included the secondment to CLP of staff resources from CEGB, at no cost to CLP (and at no real cost to CEGB given their former underutilisation), a similar arrangement with GEC, and much cost-saving by CLP itself in carrying out the construction of the plant themselves, much cheaper than if construction had been contracted to GEC. The financing package and the relationship with ECGD, both for this project and for those which followed had been crucial. It was this all-round project approach which had made it possible to buy British for Castle Peak A and to follow up with the other projects thereafter.
5. It is also this conceptual approach, as he puts it, which he regards as the key to winning projects in China. If the Chinese can be presented with an all-round package setting out, for example, proposals on precise shareholdings of joint-venture partners, procurement alternatives, and financing packages, they are much more likely to bite than if they are simply approached by a manufacturer with proposals for equipment supply. This had been the approach adopted by CLP at the time of conception of Daya Bay. Given the mountains of brochures which the Chinese held from all equipment manufacturers round the world, and given the number of decisions which they had to take on establishing priorities for power projects, he was confident that a fully-conceived project of the kind he had in mind was the most likely way to win business. He cautioned, as he had before, that UK and other overseas manufacturers only had about 15 more years in which to sell equipment. Thereafter the Chinese would be building equipment themselves, and would be selling it in competition with us into other parts of Asia. This argued for establishing long-term joint-manufacturing arrangements.
6. Comment: All this seems to indicate that his thinking remains firmly in the mode described in para 5 of your
telegram.
(I am not entirely inclined to dismiss it, either). He said that, although he was grateful for Mr Needham's offer of yourself as Stones' right-hand man, the DTI alone could not do the conceptualising that he had in mind; this would require close co-ordination with and a lead provided by industry. responded that it was precisely this sort of enabling function for which PEP was best qualified. He had only to consider
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