TNAG-1497-FCO40-2055-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 341

999-49

CONFIDENTIAL

3

The main problem is on premium, and I propose that our officials should be given a negotiating brief to make an offer that broadly matches the French position. This would entail a reduction of £5.5 million on the premium applicable to the present contractual position taking the concessionality of our offer from about 24 per cent to about 26 per cent, slightly over the 25 per cent limit that was agreed in February 1984 at

EX.

The eventual amount, and the concessionality of the premium reduction in the actual contract, will vary somewhat from this depending on the final terms of payment and scope of supply. However, I think the likely overshoot of the 25 per

cent limit will not be large.

4

I would be grateful if you and colleagues could let me know that you are content with my proposal by noon on

Friday 27 December to allow our Ambassador to see Vice Premier Li Peng on 28 December and thus meet the Chinese

timescale.

10

5

I am copying this minute to Geoffrey Howe and Ian Stewart.

Matthew Cocks

for PAUL CHANNON

(approved by the Minister and signed in his absence)

24 DECEMBER

1985

CONFIDENTIAL

2

MOLAFQ