CONFIDENTIAL
RAFT MINUTE FROM THE SECRETARY OF STATE FOR INDUSTRY TO THE
PRIME MINISTER
GUANGDONG NUCLEAR PROJECT
1.
In the light of Michael Jopling's report to you of his conversation
with Lord Kadoorie in Hong Kong you asked for an assessment of the situa-
tion on the Guangdong project (John Cole's letter to Caroline Varley of
19 January). A background note is attached at Annex A: the principal
issue for consideration at present is whether we should choose to work
in partnership with the French or the Americans.
2.
You may recall that in February 1981, against the background of
the final discussions on the Castle Peak B station in Hong Kong and
the need to give particular weight at that time to the views of Lord
Kadoorie, colleagues agreed that GEC should enter into an agreement
with the French nuclear supplier, Framatome. In the event, it proved
possible to gain the Castle Peak contract without entering into a firm
arrangement. The French for their part have since been content to
stand back from any firm commitment.
In the interim, in the absence of
any clear indication that China will go forward with the project in
the near future, it has been possible to take forward the alternative
possibility of collaborating with Westinghouse.
3. As discussions now stand the likely shape of the package which
would emerge with either partner would be broadly as follows With the
French, Framatome would supply the nuclear island and the fuel supply
while the UK would provide the conventional turbine island and a pro-
portion of the transmission network. In addition the UK might take
responsibility for the overall project design and management depending
on which partner took the lead. We would of course press the French
hard for a larger UK share but