CONFIDENTIAL

GUANGDONG NUCLEAR PROJECT

STRATEGY GROUP MEETING 12 OCTOBER

Item 1 State of play

Westinghouse

Officials met Westinghouse on 25 September to explore whether or not a Westinghouse, UK package could be devised as an alternative to a Framatome/UK approach.

Briefly, Westinghouse were appraised of HMG's and GEC's involvement with Framatome and the inclination of Kadoorie towards the French and told that if

the Chinese were to opt for a French reactor then HMG would have to alternative

but to fall behind the GEC/Framatune arrangement.

A joint arrangement between GEC and Westinghouse is attractive both from the point of view of UK content for Guangdong and also from the point of view of the longer-term development of UK nuclear capability given the Westinghouse

involvement in the PWR programme.

Westinghouse undertook to produce a paper which could be given to Kadoorie, and Stones by 9 October.

For consideration is how best to proceed with the formulation of a joint

GEC/Westinghouse proposal and the need to approach Ministers on this question.

Bechtel

Bechtel's potental involvement with Westinghouse in the UK PWR programme and

the consequent possibility that they might eventually participate in a concerted UK bid for Guangdong is currently counterbalanced by their separate approach to

the Chinese. As there is some danger that Bechtel may end up acting for the Chinese we are reluctant to discuss the detail of our position on Guangdong with them. Indeed, we have had sight of the Bechtel proposal and consider

that it runs counter to the UK interest.

Westinghouse, for their part, have told us they would like to see a Bechtel involvement in Guangdong, but they have recognised there are a number of alternative Architect Engineers who might eventually represent UK interests.

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