999-49
SECRET
They have Jean, ovalls, b
The Renter
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24 July.
our views known to the Governor.
I am aware that there is some pressure in Hong Kong to postpone contract signature and final Autorisation to Proceed (ATP) pending the outcome of the UMELCO investigations. As far as Hong Kong is concerned, contract signature is the significant step since this would be seen as firm commitment by the contracting parties. ATP is scheduled for 7 October, but there is as yet no firm date for contract signature, although it must precede ATP. If ATP is not reached by 1 November the agreed price for GEC's contract would lapse and would have to be renegotiated.
Although at this stage we do not need to take a firm view it would be awkward for us to request the Chinese to delay matters. However, I understand that a recent report suggests that the Chinese may be prepared themselves to delay signature to allow consideration in Hong Kong of the findings of the various overseas Missions from UMELCO. It is also possible there will be slippage in the remaining negotiations on the project. This again would allow the UMELCO discussions to be concluded before contract signature. On the other hand, slippage of ATP beyond 1 November would cause difficulties for GEC. Our officials should keep this under review, as part of the continuing requirement for close co-ordination on nuclear safety aspects of the project.
I am copying this letter to the Prime Minister, the Secretary of State for Energy, the Chancellor of the Exchequer, the Secretary of State for Health and Social Security, the Secretary of State for the Environment and the Secretary of State for Scotland.
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PAUL CHANNON
cind
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BOARD OF TRADE BICENTENARY
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