TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 163

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functional specification for the three PWR suppliers and recommended a

negotiated contract strategy based on two separate islands. Mr Stones

considered that there were a number of factors in favour of a negotiated route.

The effort needed to prepare specifications and evaluate responses was both

expensive and time consuming and one or two years could be saved by a negotiated

contract. Of particular significance in Chinese eyes would be the fact that

CLP had already negotiated two successful major contracts with the UK for

Castle Peak and the method was therefore well proven.

Mr Stones said that any financial arrangements offered would have to be good

to match the French. The UK would also need to give urgent consideration as

to whether or not to support HKNIC. Mr Stones envisaged a Project Management

Team including, possibly, Bechtel, with CLP to commission and run the station

for the first ten years to about 1999, after the expiration of the Lease.

would be considerable benefit to the Chinese and the CEGB if the operators

could come from the UK.

There

On equity, Mr Stones said that the Chinese wanted, above all, commitement.

The figure of 40% of HKNIC going to CLP was a purely arbitrary one and the

actual amount of cash was insignificant compared with total costs. He did

not think that the Chinese expected equity to create liability.

Mr Stones said that he believed that in about two months time Peking would

give approval for the project to proceed and he considered that the two major

tasks facing the UK were: that some senior official from the UK would go to

Peking and Guangdong to say that the UK supported CLP and would match any

French financing terms; secondly for confidence in GEC's capability to build

a 900 MW high-speed turbine set to be reinforced.

On BNFL involvement in secondary fuel supplies, current Whitehall thinking

was that BNFL stood far less chance if Framatone were the nuclear island

supplier than Westinghouse. Therefore, it would be helpful if CLP could say that it strongly favoured dual sourcing. Mr Stones said that the joint study

reported that the vendor would supply fuel for the first three years, then

2 sources of fuel would be required until Chinese facilities became available.

The advantages of having a UK fuel source were appreciated in Hong Kong.