CONFIDENTIAL
63310 - 1
GEC REQUIREMENTS ARE COMMERCIALLY REASONABLE AND ARE IN THE
INTERESTS OF BOTH CONTRACTING PARTIES IN THAT THEY HOLD OFF
TERMINATION PROCEDURES AND GIVE BREATHING SPACE FOR RESOLUTION OF
CERTAIN PROBLEMS. THE DRAFT LOAN IS SO WORDED THAT GEC WOULD BE
UNSECURED IN CERTAIN CIRCUMSTANCES UNLESS THE CONTRACT IS AMENDED.
THE ONLY BASIS ON WHICH GEC WOULD FEEL ABLE TO PROCEED WOULD BE IF
ECGD TOOK THE RISK AND WE LIKE GEC ARE UNWILLING TO ACCEPT
UNSECURED CONTRACT RISK ON THE JVC. OUR SUPPORT OF THE PROJECT IS
PREDICATED ON GEC BEING ABLE TO OBTAIN PAYMENT FROM BANK OF CHINA'S
LOAN WHEN THEY HAVE PERFORMED TRANCHES OF WORK. THEY CANNOT BE
EXPECTED TO WORK ON IN CIRCUMSTANCES WHERE THERE IS NO SECURE SOURCE
OF PAYMENT IN PLACE. THIS CAN BE ACHIEVED BY A SUSPENSION, TERMIANATION AND ARBITRATION PROCEDURE. AT PRESENT THE CONTRACT IS
DEFECTIVE ON SUSPENSION.
3. IF NECESSARY WE SHALL TELEGRAM TOMORROW A SPECIFIC LINE TO TAKE.
HOWE
OCMIAN 3310
GUANGDONG
[COPIES SENT TO NO 10 DOWNING STREET]
LIMITED
HKD
FED
NED
TRED
PUSD(MR CROWLEY) WED
P6
PS/MR RENTON PS/PUS
SIR W HARDING
MR DAUNT MR WILSON MR SLATER
ADDITIONAL DISTRIBUTION
GUANGDONG NUCLEAR
2-
Confidential