CONFIDENTIAL
GR 593
CONFIDENTIAL
FM HONG KONG 230925Z DEC 82
TO IMMEDIATE F C O
TELEGRAM NUMBER 1510 OF 23 DECEMBER
INFO IMMEDIATE D OF I (FOR MANZIE)
INFO PRIORITY PEKING
INFO SAVING BTC HONG KONG
HAKIGE!
GUANGDONG NUCLEAR PROJECT
NO
78209/12 Afz9 112
1. AFTER LENGTHY AND FRUSTRATING DELAYS THIS PROJECT NOW APPEARS TO BE GATHERING MOMENTUM. IN ADVANCE OF MANZIE'S VISIT HERE EARLY NEXT MONTH (WHICH I WELCOME) IT MAY BE WORTH RESTATING THE BASIC POSITION OF THE HONG KONG GOVERNMENT.
2. WE RECOGNISE THE POLITICAL SIGNIFICANCE FOR HONG KONG OF A MAJOR PROJECT THE FINANCIAL VIABILITY OF WHICH DEPENDS ON THE PURCHASE OF ELECTRICITY BY HONG KONG, IN CONVERTIBLE CURRENCY, WELL BEYOND 1997. WE ALSO RECOGNISE THE IMPORTANCE OF THE PROJECT (ASSUMING GEC GET THE CONTRACT FOR THE CONVENTIONAL ISLAND) FOR INDUSTRIAL COLLOBORATION BETWEEN BRITAIN AND CHINA, AND FOR UK EXPORTS. WE WILL THERFORE DO WHAT WE CAN TO BE HELPFUL, AND WILL CERTAINLY NOT WISH TO PUT OBSTACLES IN ITS WAY. WE HAVE ALREADY
AGREED IN PRINCIPLE THAT HONG KONG SHOULD TAKE POWER FROM CHINA
PROVIDED THAT THE COST IS NO GREATER THAN IT WOULD BE IF THE
NECESSARY FOSSIL FUEL BASED GENERATING PLANT WERE PROVIDED IN HONG KONG. THIS WAS MADE PUBLIC IN MY LEGCO SPEECH ON 6
OCTOBER.
3. THE EXECUTIVE COUNCIL WOULD NEED TO BE CONSULTED BEFORE WE COULD GO BEYOND THIS. THE POINTS ON WHICH THEY ARE LIKELY TO
CONCENTRATE ARE:
(A) THE OFFTAKE AGREEMENT: AND
(B) THE PROPORTION OF EQUITY IN THE PROJECT TO BE HELD BY CHINA LIGHT AND POWER (CLP) OR OTHER HONG KONG INTERESTS'.
4. THE OFFTAKE AGREEMENT, OR GUARANTEE OF OFFTAKE IS PRIMARILY A MATTER FOR THE POWER COMPANIES, NOT FOR THE HONG KONG GOVERNMENT. NEVERTHELESS, THE TERMS OF ANY OFFTAKE AGREEMENT WOULD HAVE TO BE SUBMITTED TO EXCO FOR APPROVAL IN VIEW OF THE POSSIBILITY THAT IT COULD AFFECT THE COMPANIES' POSITION IN RELATION TO THE EXISTING SCHEMES OF CONTROL. THE OFFTAKE AGREEMENT WOULD ALSO NEED TO BE CONCERNED WITH THE SUPPLY OF
ELECTRICITY TO HONG KONG AS A WHOLE, NOT JUST THAT PART OF THE TERRITORY SERVED BY CLP. SO THE HONG KONG ELECTRIC COMPANY (HEC)
WOULD ALSO NEED TO BE INVOLVED.
CONFIDENTIAL
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