TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 27

Mr Stones stated that if he were the customer, he would expect the

nuclear island vendor to supply the first charge so as to accept

in full liability for the performance of the plant. It was for the

reactor vendor himself to decide where he bought fuel but in any

event he would bear the risk.

Mr Paul then initiated a short debate on how the Guangdong Nuclear

Project fitted into China's overall energy policy. He wondered

whether there were any other nuclear projects in China, and whether

the Chinese were not in fact placing more emphasis upon hydro-

electric projects. Mr Stones said that he thought the project would

go ahead in Guangdong, rather than Shanghai, because of its nearness

to Hong Kong and the lack of local fuel resources, but most of all

because the project would be self sufficient in terms of foreign

exchange through the sale of electricity to China Light and Power.

There were already signs that Guangdong Province was running short

of foreign exchange as their purchases of electricity were declining.

There was no conflict between this project and hydroelectric

projects as the Chinese had an enormous short-fall in generating

capacity. Based upon a comparison with Hong Kong, (where consumption

was well below the level of industrialised countries), Guangdong

Province was short of 40,000 MW, and the whole of the People's

Republic of China was short of approximately 700,000 MW, a truly

enormous figure. Mr Potter added that his informants in the Second

Ministry of Machine Building had said that Guangdong is not part

of the overall nuclear policy which was to concentrate on small

indiginous plant.

Mr Lippitt then asked Mr Clift about the effect of the expiration of

the Lease in 1997, and the effects on foreign loans. Mr Clift said

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