TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 15

there would only be a small advantage in terms of prices to consumers in Hong Kong (paragraphs 23 to 28 above) and, unless CLP were able to negotiate changes on the lines described in paragraph 26 above, for the first three years the unit cost of electricity with power from the nuclear project would be more expensive than if there were no nuclear power available (paragraph 25 above). This situation would be aggravated by any delays during the construction period (paragraph 28 above);

Hong Kong would be relying on the building of a power station outside its own borders and would then be taking power in substantial quantities from sources beyond its control;

the whole project is complicated. It involves:

(i)

(ii)

building and operating a nuclear power station in a country where many of the relevant technical advances are as yet untried in practice. (Comment: this is why CLP will have a substantial say in the management and running of the power station); probably a partnership of French and British suppliers;

(iii) if British suppliers were to get the orders for the generating equipment, some uncertainty would be introduced in as much as they have only built sets smaller and larger than 900 mw up till now. (paragraph 22);

(iv)

too many interests that are not directly related to supplying Hong Kong with electricity.

Purely in terms of the supply of electricity, the balance seems to lie against the project. The political arguments (although only vaguely related to 1997 via the fact that the loans would be finally repayable in 2003) pull the balance in favour of it. In supporting the project Hong Kong would be helping both China to increase its technical capability and its supplies of electricity and British industry to find further markets. And provided certain precautions are taken (see paragraph 33 (f) above), it would probably pay no more for the electricity than it would for power generated within its borders.

Hong Kong Electric

35

HEC have an interest in the nuclear power station for two reasons. The first is that some time ago GPC asked HEC if they were interested in participating in a nuclear station in China. The second is that HEC will have

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