CONFIDENTIAL
ACTION
tell Lord Kadoorie of Bechtel's activities, and he would also
mention it, if an opportunity arose, with Dr Marshall.
There was
a need to bring the Embassy up to date on Bechtel and to ask them
whether they could obtain any details of how the presentation had
been received. Mr March should also be kept in touch. It was also
reported that the next Ministerial activity would be a visit by
the Minister for Trade, Mr Rees who would be visiting Peking,
Guangdong and Canton 10-17 December; the Prime Minister would be
і схора із having breakfast with the Chinese Prime Minister in Mexico in two
or three weeks time.
Mr Manzie
Mr Manzie
FED
Mr Ranson had, at a previous meeting, undertaken to get in touch.
with GEC to ask for details of their estimated cash flows on the
project to enable ECGD to calculate various rates of subsidy.
Mr Ranson said that he had not asked GEC, but had instead made
certain assumptions; he then tabled a letter from himself to
Mr Hawtin giving a range of options. He continued that the
concensus interest rates would probably be rising to around 10%
for China on 16 November and although nuclear stations were still
excluded from the terms of the concensus, they were caught by
interest rates. Consequently, if an offer of 72% were to be made
to the Chinese, a letter would have to go from ECGD to GEC before
16 November but this in turn would require Ministerial approval.
would preserve sin interer rate it 73%/ provided that a contract was Such an offer did have the disadvantage of theoretically requiring
that a letter of intent by issued by the Chinese within 6 months.
of that offer, but some flexibility could exist. Mr Hawtin confirmed
that Tender-To-Contract cover was not being actively advertised
by ECGD because the Bank had run into legal problems; there was,
though, nothing to stop GEC from applying for it. Cost Escalation
Cover was likely to continue for at least another year.