00 PEKING 250100Z
GRS 580
CONFIDENTIAL
DESKBY 250100Z JUL 80
TIKKI66/1
68A)
TOP COFY
RECEIVED IN REGISTRY NO. 51
CONFIDENTIAL 2 8 JUL 1980
DESK OFFICER
REGISTER
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INDEX
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Action торба
No
FM FCO 241645Z JUL 80
TO IMMEDIATE PEKING
TELEGRAM NUMBER 398 OF 24 JULY
AND TO IMMEDIATE HONG KONG
INFO IMMEDIATE BTC HONG KONG
GUANGDONG NUCLEAR POWER STATION PROJECT
1. YOU WILL HAVE SEEN FROM BTC HONG KONG RECENT TELEGRAMS THAT
THIS PROJECT IS GATHERING MOMENTUM.
2. WE SEE CONSIDERABLE DANGER THAT THE CHINESE, GENUINELY OR WILFULLY, MAY INTERPRET WHAT SLK/STONES AND MARSHALL ARE SAYING
AS INDICATING HMG'S POLICY. IN PRACTICE, OUR AUTHORITY FROM MINISTERS IS CLOSELY CONFINED TO ALLOWING EXPLORATORY WORK TO GO
AHEAD, BUT WITH NO COMMITMENT TO ANY LEVEL OR TYPE OF SUPPORT TO
EVENTUAL OPTIONS PROPOSED. WE ARE ESPECIALLY WORRIED AT THE
STONES/MARSHALL REFERENCES WHICH MIGHT BE TAKEN AS IMPLYING HMG COMMITMENTS TO THE PROVISION OF EQUITY TO THE HK BASED OPERATING
ENTITY, FOR LIABILITIES UNDER SAFETY AND FINANCING, AND THE EXTENT OF LONG TERM ECGD BACKED FINANCE. THE CHANCES OF MINISTERS BEING PREPARED TO TAKE FUNDAMENTAL DECISIONS ON THESE ISSUES ARE
REMOTE IN THE ABSENCE OF KNOWLEDGE OF THE NUCLEAR ISLAND CONTRACTOR AND THE CORRESPONDING COST, OF CLEAR UNDERSTANDINGS ABOUT THE OPERATING RESPONSIBILITIES, AND THE FINANCING TERMS TO
BE APPLICABLE TO THE PROJECT AS A WHOLE.
3. TO GIVE MINISTERS THE NECESSARY LATITUDE FOR DECISION, IT
WOULD SEEM DESIRABLE THAT WE SHOULD INDICATE TO THE CHINESE THAT HMG IS AWAITING THE OUTCOME OF THE CLP/KEC STUDIES BEFORE TAKING A VIEW ON THE MAJOR ISSUES INVOLVED. IN DOING THIS, WE SHOULD UNDERLINE THAT THE PARTICIPATION OF MARSHALL HAS BEEN STRICTLY ON THE BASIS OF AN INDEPENDENT TECHNICAL ADVISER TO THE STUDY TEAM.
WE RECOGNISE THAT THE HANDLING OF SUCH A COMMUNICATION WILL NEED
CARE TO AVOID UNDERMINING THE POSITION OF SLK AND MARSHALL AND
THE GENERALLY PROMISING PROGRESS MADE SO FAR.
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