TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 65

ODE

18-77

(T)

GUANGDONG

think I shared refert farms 1-4 to Deft of Industry, plus comments, if any,

if any, from DREE.

Вилис 16 ро

1. Léon Aboudarham, Commercial Director of Framatome, invited me to lunch on 14 October. He said that there was nothing particularly new happening on the Guangdong project but. that he liked to keep in touch. I mentioned that the Chinese had told us that they were asking the French whether the new Government stood by the terms of the undertaking on financing given by President Giscard last year.

We were hoping to ask the DREE how they would reply..

2. M. Aboudarham laughed. He explained that the Chinese had not taken a decision to go ahead with the power station in June as they had hoped. There were two schools of thought: those who wanted an early positive decision and those who wanted to wait until China could go ahead on her own rather than in partnership with Hong Kong. The disagreement had been resolved by delaying the decision until the end of the year, when it will be necessary to decide whether or not the project should feature in the next Five Year Plan.

3. The French had invited the Chinese authorities to send a delegation to Paris to discuss the details of financing. The Chinese had not yet accepted the invitation and there again, there were those who were in favour of accepting it in order to help them reach a decision by December, and those who wanted to await the December decision before engaging in detailed discussions with the French. The Chinese were therefore embarrassed by their own failure to respond to the French invitation and expressed their embarrassment by continuing to ask the French for an answer to the question mentioned above. It was proving difficult to persuade officials in France that this was a perfectly normal way for the Chinese to behave and that the last thing they wanted was a simple reply to their question.

4. He said that he still did not know what financial terms had been offered to the Chinese the Government were still keeping this a closely guarded secret. He knew it was rather more attractive than conventional financing.

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5. We went on to discuss such questions as Dr Marshall's attitude to the French M. Aboudarham said that Dr Marshall was visiting France in December to see the first 1300 MW PWR; he thought he would fly direct to Cherbourg rather than go by Paris.

6. On the Creusot Loire/Framatome problem M. Aboudarham said that the newspaper reports were generally correct but he could not add much to them. He said that the marriage of a mother company to its own daughter would be a rather special kind of

incest.

7. He said that the Government's decision to reduce from 9 to 6 the number of PWRS to be ordered in 1983-1984 was a blow to Framatome. They had had twice the capacity needed to produce at the previous rate and export orders were not going to make up the gap.

But he seemed relieved that at least they had a decision and that things were not worse than they were.j

сс cc C(F)

Ilka

JC Kay

15 October 1981