COMMERCIAL IN CONFIDENCE
4
functional specification for the three PWR suppliers and recommended a
negotiated contract strategy based on two separate islands. Mr Stones
considered that there were a number of factors in favour of a negotiated route.
The effort needed to prepare specifications and evaluate responses was both
expensive and time consuming and one or two years could be saved by a negotiated
contract. Of particular significance in Chinese eyes would be the fact that
CLP had already negotiated two successful major contracts with the UK for
Castle Peak and the method was therefore well proven.
Mr Stones said that any financial arrangements offered would have to be good
to match the French. The UK would also need to give urgent consideration as
to whether or not to support HKNIC. Mr Stones envisaged a Project Management
Team including, possibly, Bechtel, with CLP to commission and run the station
for the first ten years to about 1999, after the expiration of the Lease.
would be considerable benefit to the Chinese and the CEGB if the operators
could come from the UK.
There
On equity, Mr Stones said that the Chinese wanted, above all, commitement.
The figure of 40% of HKNIC going to CLP was a purely arbitrary one and the
actual amount of cash was insignificant compared with total costs. He did
not think that the Chinese expected equity to create liability.
Mr Stones said that he believed that in about two months time Peking would
give approval for the project to proceed and he considered that the two major
tasks facing the UK were: that some senior official from the UK would go to
Peking and Guangdong to say that the UK supported CLP and would match any
French financing terms; secondly for confidence in GEC's capability to build
a 900 MW high-speed turbine set to be reinforced.
On BNFL involvement in secondary fuel supplies, current Whitehall thinking
was that BNFL stood far less chance if Framatone were the nuclear island
supplier than Westinghouse. Therefore, it would be helpful if CLP could say that it strongly favoured dual sourcing. Mr Stones said that the joint study
reported that the vendor would supply fuel for the first three years, then
2 sources of fuel would be required until Chinese facilities became available.
The advantages of having a UK fuel source were appreciated in Hong Kong.