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ANNEXB
FINANCIAL LIABILITIES RELATING TO THE GUANGDONG NUCLEAR POWER PROJECT
1.
The Guangdong Nuclear Power Project could give rise to financial liabilities. It has to be decided how the cost of such liabilities. can best be borne. This paper enumerates the main risks and
considers whether it should be Government or commercial interests
who should bear the costs. In respect of some liabilities, the
Government may be bound by international Convention; for others, the Hong Kong and UK Governments may wish to assume the liability
by agreement. These matters are considered below.
Delays in the Construction of the Project
2. These could arise from a variety of causes: delivery delays, faulty equipment, labour difficulties, etc. As all parties will need to be adequately assured that the project will be completed, they would seek to make normal commercial provisions to that end. The customer would doubtless require a performance bond to be provided by the contractor and the latter would seek to limit his
liability in the event of delays. The contract should provide for
an equitable settlement for termination of the construction of the project from whatever cause.
3. A fundamental requirement of any support that the ECGD might provide for the financing of the UK element of the project, will be a guarantee of repayment from the Bank of China. It is possible that in recognition of the 40% Hong Kong participation in the venture, the Bank of China will seek a counter-guarantee from Hong Kong for a proportion of their commitment.
Accidents and Damage at the Site during the Construction Period
4.
During both the construction stage and the commissioning period up to the time that is when the station is handed over to the operator, the contractor would take out insurance against delays, accidents, damage etc on site. In addition, the contractor would have to provide for insurance cover for the storage of fissile nuclear
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