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CONFIDENTIAL.
3.
On the role of the PMC (Project Management Company), it was apparent that KEC was interested. Many questions were raised and KEC seemed happy that by participating in the PMC, both KEC and CLP would be able to train their engineers and absorb valuable experience from a project of this magnitude, while at the same time contribute toward the building of the nuclear
power plant.
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Mr. Chen Gang said that he agreed to the idea of the two companies participating in the project and acquire experience in the process. He said that the idea of the PMC should be further explored.
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KEC had total trust in CLP and the Chinese Government wanted KEC to work in collaboration with CLP. However, in the
of HKNIC, KEC was not very sure of its composition and expressed some anxiety on this point.
On the length of period for the repayment of foreign lcans, KEC felt that 25 years appeared to be a little too long and said that a period of 20 years would seem more appropriate.
KEC felt that the possibility of obtaining 20% RMB loans from within China #as not very big and requested CLP to consider a situation where increased equity from the two companies and more foreign loans could be obtained to cover the shortfall. Mr. Chen envisaged that in 7 to 8 years time, foreign exchange situation in China would have improved sufficiently to make
to repay the foreign loans. money available from other sources
to
On the rate of taxation, Mr. Chen said that KEC would put a case before the Government (both Central and Provincial) and ask for a reduction. He said the rate should be such as ensure CLP's legitimate profit and at the same time guarantee- ing the conpetitiveness of the electricity generated from the nuclear power plant.
For the electricity sold from KEC's share, to CLP, Mr. Chen Gang enquired whether CLP could consider paying a higher percentage than the 10% mentioned in item 5(c) of Mr. Stones'
paper.
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