COMMERCIAL IN CONFIDENCE
The second method listed above is only possible for a very strong electric utility with a large experience of nuclear power. It is, therefore, 10 propriate to discuss it any further here.
The third method, using architect engineers, has been the standard procedure in the USA but there has been criticism of that following the Three Mile Island accident because it is not usual for an architect engineer company to know as much about nuclear power as a nuclear company itself. this method, therefore, the quality of the architect engineer company is vital.
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In a comprehensive contract the customer appoints one or, at the most, two companies to engineer the plant but retains the management and key decisions to itself. The Castle Peak project in Hong Kong is of this type. It has the advantage that it encourages the maximum use of local resources and labour and it encourages the transfer of technology to the maximum extent.
However, for it to work properly the responsibilities of the customer, the project manager and the contractors must be defined with very great care. The joint customers (KEC/CLP) would need to strengthen their resources for this method but not to the extent of Method 2.
It would be helpful if the Executive Committee or the Management Committee could give an early identification of the contracting method they favour. If the speed of the project is all important, we might place a fixed price turn key contract. If we wish to maximise the contribution of local industry to the construction of the reactor, a comprehensive contract would be best. But we must also recognise that this discussion is very simplified und in practise these four methods are not sharply distinct from from another.
Safety
The safety of the reactor is a matter which comes under the juris- diction of Guandong and the Chinese Government. Hong Kong has no status in this matter. Nevertheless, the population of Hong Kong are certain to ask questions about the safety of the reactor and, in my opinion, the Governor of
Hong Kong will ask the British Nuclear Installations Inspector for informal assurances on this matter. For this reason it is essential that we adopt the highest possible safety standards so that we can satisfy the Provincial Government of Guangdong and retain the confidence of the population of Hong Kong,
Style of the Safety Organisation
Safety organisations throughout the world have the same broad objectives but their style of operation varies from one country to another depending upon circumstances. For example, the USA has a very large number of electric utilities and it is not possible for the Nuclear Regulatory
It therefore works Commission to interact with each of those individually. by framing regulations which, if followed meticulously, ought to lead to reactor safety. This approach has been criticised by the Kemeny Commission
eport which argued there should be a distinction between regulation and safety and that the utilities should take a positive role in ensuring safety. Germany the safety organisation is complex and has some similarities to the USA
In France and position with regulations and legal actions being very important. the UK, the situation is dominated by a single large utility but the safety
All safety authorities play an important and vital role in the total industry. decisions are based on technical evidence and legal procedures using the courts never arise. Whatever solution is adopted in China, it is important to retain
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