TO DECIDE TO CONVERT DAYA BAY TO A THERMAL POWER STATION. THE CLP BOARD IS CURRENTLY VERY CONCERNED ABOUT NUCLEAR LIABILITY. LORD KADOOR HE IS RELUCTANT TO SIGN THE INTERCONNECTION AGREEMENT WITH THE GNPJVC UNLESS CLP CAN BE GIVEN LEGAL PROTECTION ON BOTH SIDES OF THE BORDER. WE UNDERSTAND THAT THE GNPJVC HS UNLIKELY TO SIGN THE FRAMATONE AND GEC CONTRACTS UNTIL THE INTERCONNECTION AGREEMENT HAS BEEN SIGNED.
3. (NEXT FOUR WORDS UNDERLINED) IMPLICATION FOR HONG KONG.
(#) AS REGARDS ELECTRICITY SUPPLY, SHOULD THE DAYA BAY NUCLEAR
PROJECT BE SHELVED, ADDITIONAL GENERATING FACILITIES WOULD BE NEEDED TO MEET THE EXPECTED DEMAND IN HONG KONG HN THE EARLY 1990S. THIS COULD BE MET BY A THERMAL STATION EITHER AT DAYA BAY OR IN HONG KONG. HF DAYA BAY WERE TO BE SHELVED COMPLETELY, A DECISION WOULD HAVE TO BE TAKEN BY 1988 AT THE LATEST REGARDING ALTERNATIVE SOURCES OF POWER GENERATION.
(HP) GIVEN THE INSTABILITY OF FOSSIL FUEL PRICES AT PRESENT, IT IS
DIFFICULT TO SAY WITH ANY CERTAINTY HOW THE PRICE OF ELECTRENCHTY GENERATED CONVENTIONALLY WOULD COMPARE WITH THAT OF NUCLEAR POWER. WHAT CAN BE SAND WHTH CERTAINTY IS THAT IN THE PRESENT MOOD THE PUBLIC WOULD MUCH PREFER A FEW EXTRA CENTS ON THE TARIFF TO A NUCLEAR POWER STATION 50 KMS AWAY.
4. # SHOULD MAKE CLEAR THAT, AT LEAST AT PRESENT, MOST MEMBERS OF THE LEGISLATIVE COUNCIL EXPECT THAT AS LONG AS L PENG SN CHARGE THE CHINESE WILL CONTINUE WITH THE PROJECT. SOME BELIEVE THAT LIN
PENG IS TOO COMMITTED TO IT TO BE ABLE TO WITHDRAW WITHOUT INTERNAL POLITICAL CONSEQUENCES.
5. ## SHOULD ALSO EMPHASIZE THAT THE DECISION MUST ESSENTIALLY BE ONE FOR THE CHINESE TO TAKE. OUR AIM IS TO ENSURE THAT #N TAKING IT THEY ARE AWARE OF THE POLITICAL CONSEQUENCES HN HONG KONG OF DOING SO. IT WOULD CERTAINLY NOT IMPROVE OUR RELATIONS WITH THEM IF WE APPEARED TO BE TRYING TO TAKE THE DECISION ON THEIR BEHALF. WE MUST ALSO HAVE OUR CONTRACTUAL COMMITMENTS TO CLP/HKMIC
IIN MIND.
YOUDE
LIMITED
HKD FED
NED
TRED
PUSD (MR CROWLEY)
PS
PS/MR RENTON
PS/PUS
SIR W HARDING
MR
DAUNT
MR WILSON
COPIES TO:
PS/NO 10 DONNING ST.
-2- CONFIDENTIMI