CONFIDENTIAL
negotiations by end of summer, though this is ambitious timetable. It has been made plain to all interested parties, including CLP, that in contrast to the Castle Peak Power Station projects (for which GEC are main contractors), DTI do not intend to take central
role in negotiations on conventional island. These must be left to GEC, though it may be necessary for officials to take part in final
stages.
French attitude
4.
Although we have recently received indications both from Chinese and CLP that French are still seeking to secure entire
project themselves, French officials insist they are committed to
Anglo/French approach.
Financing of HKNIC
5. Lord Kadoorie repeatedly pressed HMG to put equity into Hong Kong Nuclear Investment Company (HKNIC) and was bitterly disappointed that Prime Minister turned down this proposal
(principally because it would run counter to privatisation policy).
He still regards proposals as great opportunity misguidedly rejected
by UK, and may seek to raise issue again. Nevertheless CLP have
gone forward with incorporation of HKNIC with a nominal initial
capital.
6.
Unlikely to be any difficulty in finding further finance, if
Hong Kong Government agrees reasonable return through the electricity tariff on investment in the company. This is still under consideration. Likely that HKNIC will be financed from HK$200 million CLP equity, HK$100 million Hong Kong Electric Company equity and HK$500 million loan guaranteed by HKG, but no final decisions reached yet.
Safety
HKG
7. Public interest in Hong Kong in safety aspects is growing.
have now asked DTI to provide briefing material on health and safety
aspects of nuclear power. UK Atomic Energy Authority may also
CONFIDENTIAL