CONFIDENTIAL
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3. Q.
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CONFIDENTIAL
Answers Provided by Management Committee
Why this insistance by the KEC on equity participation on basis?
a 60/40
When asked why KEC prefer CLP equity participation, Mr. Chen Guang gave the following reasons:-
(a) KEC wished to acquire CLP management techniques through CLP participation in management. If there was no CLP equity participation,
would not be possible for CLP to
(b)
it
participate in management of the nuclear power station.
If CLP participates in equity, the initial investment by KEC would be less, accepting the fact that this will mean part of the profits would go to foreign investors. This is of particular importance when foreign currency requirement is considered. If CLP is to participate, KEC would require very minimal foreign currency as initial investment because their participation will be in a .form of labour for construction and civil works.
Why do they continually mention that top PRC officials favour this?
The
It
can be
to this question is not known. precise answer interpreted, however, that PRC has put a lot of emphasis to this project because it would strengthen the connection between the PRC, the U.K., Guangtung Province and Hong Kong. As this project has such a big political impact to all concerned, support from top PRC officials is vital. Besides, as this will be the first Four of the nuclear power station in China and being symbolic of Modernisations, it is not surprising that it received attention from the top officials.
that neutrality in our negotiations is not
hints Why the primary importance?
of
KEC stated that they did not expect CLP to maintain neutrality in the first place. Given the choice of joint venture and CLP being "biased" ΟΙ no joint venture and CLP being neutral, KEC would probably opt for the former.
KEC indicated that CLP had the right to insist on neutrality but KEC did not request for neutrality to be maintained. As far as they are concerned, they anticipate CLP to obtain U.K. support on this project. They agreed and encouraged CLP to approach U.K. Government on this matter. KEC said U.K. support to CLP on this project was just as important as PRC's support to KEC.
to
KEC agreed with CLP that a project of this nature required backing from Covernments and therefore they would not like proceed with this project without U.K.'s support.
A.
Q.
Why the suggestion that advocate British plant?
should We
come out in the
open
and
A.
Having accepted that U.K.'s support is required for this project, they accepted the fact that U.K. would suggest the project to use British plant in exchange for the support from U.K. KEC has no objection in using British plant (except nuclear island) provided that the price and performance of British plant are competitive.