CONFIDENTIAL
TIALquest
the credibility of SLK 80 the Ambassador would be quested to give
his own personal views only. At the same time, he would be asked for
advice on how HMG could make a general approach to the Chinese.
Mr Manzie was ooncerned that Dr Marshall, Sir Lawrence Kadoorie and
Mr Stones were implying a commitment from HMG which went far beyond
what Ministers had approved. Given Dr Marshall's position in the
UKAEA, it would not be at all surprising if the Chinese jumped to
the eronous impression that he was speaking wihh the knowledge and
authority of HMG.
Mr Brown to draft
a clear telegram
The meeting then considered the 4 main issues identified in Mr Brown's
Disaster liability and equity participation were considered
paper.
to be at least partially inter-related. JNU said that under
International Conventions, on the operating company, absolute liability
was clearly placed. However, given the scale of risks involved
Government underwriting of operator liabilities was normal. An
alternative would be to seek to place liabilities on the Government
of the nuclear island supplier.
The international position on operating company liability, reinforced
arguments of normal commercial practice that HMG should not take
equity. At the same time, HMG might have to underwrite some part of
the share issue. However, some political gesture by the Hong Kong
Government and HMG might be necessary and it was felt that the
Hong Kong Government would only take equity as a political gesture
if this were approved by HMG. Sir Lawrence Kadoorie himself was not
inclined to take any equity, and ECGD would be concerned if he did so
given CLPS debt/equity ratio and its indebtedness to the UK.
A furthe