TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 4

the PRC Central Government would not be directly involved in the joint venture, but major decisions concerning the project must be referred by the provincial authorities back to Peking; betare-on all buyon samay

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the Chinese have expressed a preference for pressurised (light) water reactors. The French have considerable experience in manufacturing this type of reactor, and the Chinese have had discussions with them on the. bor subjectiv The United States also manufactures them but

imposes stringent safeguard provisions. The British have a licensing arrangement with the US firm of Westinghouse, but have not yet manufactured a pressurised water reactor and would probably have to cani puse some parts made in France in order to do so.

The Chinese do not appear to be interested in other Loom possible sources of supply, and the choice is therefore

likely to be between French and British equipment. einem CLP have so far maintained a position of neutrality in

respect of what equipment might be used in the proposed on power station;::

(g)

A

CLP have indicated to KEC that, in principle, they would be prepared to consider purchasing power from the plant provided it was certain that the supply would be secure, continuous and commercially acceptable, and provided that the amount of power purchased would not prejudice the normal amount of reserve plant that they would require to maintain the service offered by their existing power stations;

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(h) both CLP and KEC recognise that considerable

...difficulties would be encountered in arranging the

financing of a project of this size, and thought is being given to forms of "compensatory" (or barter) trading, megan exchange of electricity for oil and other

minerals; ho

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(i) KEC would have no objection to the Hongkong Electric

Company Limited (HEC) participating in the joint venture;

(j)

PH.012 ***

KEC said that they have been looking for suitable sites and that they now considered the most promising locations to be in the Bias Bay area, about 30-130 km Migo east of Hong Kong

(k)

the final feasibility report is to be submitted to the Executive Committee as soon as possible, but in any event before the end of September 1980;

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(b)

CONFIDENTIAL #2

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