CONFIDENTIAL
GUANDONG NUCLEAR PROJECTS
STRATEGY GROUP MEETING 12 OCTOBER
Background Note
Item 2 Financial Issues
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The meeting of officials on 5 October noted
the continuing uncertainty as to the eventual partnership configuration (the effect on UK content ranging from Circa £370m for turbine generators alone to £600m with involvement in the nuclear island
including the supply of fuel by BNFL);
the possibility that the Chinese might make a sudden announcement of
their intentions and call the UK forward to negotiate,
the need to be seen responding to pressure from CLP
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d
and agreed we could at least speculate (with a probable accuracy of ± 15% of costs on UK content for conventional equipment and therefore consider putting forward recommendations to Ministers on financial terms in principle on the assumption that later additogns in terms of scale would be supported pro rata.
1 Repayment Period.
No clear view emerged and this will need to be discussed further. Treasury were not prepared to concede 15 years without seeing the figure work, but do not object to testing the ground with Ministers in principle.
DoI felt that the credibility of a Government-to-Government approach depended largely (as in the case of Castle Peal:) on making our best offer ab initio and that the Chinese would in any case be aware of the availability of 15 years elsewhere eg Korea and would expect such an offer. Furthermore the feasibility study presines a 15 year repayment period.
ECGD felt that any eventually agreed repayment period should only be an offer for a limited time and it was agreed that this as a sensible approach.
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