TNAG-1501-FCO40-2059-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 68

OCMIAN 4597

CONFIDENTIAL

OO HOKON

PP HKBTC

FM FCOLN TO HOKON

05100OZ AUG

GRS 1557

CONFIDENTIAL

54597 - 1

CONFIDENTIAL

FM FCO

TO IMMEDIATE HONG KONG

TELNO 1670

OF 05100OZ AUGUST 86

AND TO IMMEDIATE PEKING, PARIS, UKMIS VIENNA

INFO PRIORITY BTC HONG KONG,

H.K. TELNO 2498: CHINA: NUCLEAR SAFETY

1.

DTI, FCO AND DEPARTMENT OF ENERGY OFFICIALS MET ON 1

AUGUST TO REVIEW THE POSITION AND CONSIDER OUR NEXT STEPS.

TIMING OF CONTRACT SIGNATURE

A.

2.

WE HAVE DISCUSSED THIS WITH ECGD, GEC, AND THE FRENCH. WE BELIEVE THE CHINESE STILL HOPE TO SIGN THE CONTRACTS IN

SEPTEMBER. BUT THERE ARE A NUMBER OF IMPORTANT POINTS

OUTSTANDING ON FINANCING WHICH MUST BE RESOLVED BEFORE CONTRACT

SIGNATURE. RECENT NEGOTIATIONS INVOLVING ECGD HAVE IF ANYTHING

REOPENED PROBLEMS ON THIS FRONT. WE UNDERSTAND VIA GEC THAT

THERE ARE ALSO NUMEROUS ISSUES ON WHICH THE JVC HAVE STILL TO

RECEIVE APPROVAL FROM THE CHINESE AUTHORITIES. OUR CONCLUSION IS

THAT THERE IS A VERY HIGH PROBABILITY THAT CONTRACT SIGNATURE

WILL SLIP INTO OCTOBER.

3.

IF WE CHOSE TO DO SO, WE WOULD OURSELVES HAVE THE

ABILITY DISCREETLY TO PUT THE BRAKE ON PROGRESS TOWARDS SIGNATURE

SHOULD PROGRESS UNEXPECTDLY ACCELERATE. BUT THERE ARE A NUMBER OF

COMMERCIAL CONSTRAINTS AND DEADLINES. THE TARGET DATE FOR

1

CONFIDENTIAL