TNAG-1502-FCO40-2060-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 124

ECGD

Mcc FED

HAD &

(2)p.a.

642%

Export Credits Guarantee Department PO Box No 272 Aldermanbury House Aldermanbury

London EC2P 2EL

Telephone 01 382 7000

Direct 01 382

Fax 01 382 7649 Telex 883601

Your reference

444

RE Adams Esq HM Treasury

Treasury Chambers Parliament Street

LONDON

SW1P 3AG

Our reference

EFD 3/19/7/27

Date

17 July 1986

воск

I

Dear

BALFOUR BEATTY

CHINA LIGHT & POWER CO

-

HONG KONG

TRANSMISSION LINE FROM GUANGDONG NUCLEAR POWER STATION

(CHINA) TO THE NEW TERRITORIES

1

I refer to Mike Pentecost's letter to you of 14 December 1984 and your reply of 14 January 1985 concerning Balfour Beatty's bid for the above mentioned business.

2

We have now been informed by Balfour Beatty (at a meeting held on 15 July) that China Light & Power Company are to discuss, at a board meeting to be held at the beginning of August, whether to put the contract out to international tender. In view of the intense competition Balfour Beatty are likely to face from the Japanese in the event of the contract going out to international tender they see their best chance of securing the contract as being by way of a negotiated contract by meeting China Light & Power Company's demand for Hong Kong dollar finance at the current Consensus rate.

3 We propose to agree to Balfour Beatty's request for finance in Hong Kong dollars as China Light & Power Company is one of the companies for which it has been agreed that we may initiate offers of Hong Kong dollars finance under the new rules. I should be grateful if you would let me know urgently if the current -Consensus rate of 8.75% can be quoted for this business.

4

For your information the UK content of the contract price is now £50m of which £38m relates to transmission lines and the balance to a sub-station to be built at Lian Tang (related to the NEI/GEC potential contract my letters to you of 17 June 1986 and 2 July 1986 refer). We expect to support a loan for 85% of the UK content and an amount equivalent to 15% of the UK element for locals (which have yet to be quantified) with 81⁄2 years credit (estimated drawdown is 4 years).

MAK Sherwani

PD1 Foreign Currency Documentation Branch.

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T JH Downing M Baker

Dr R C Dobbie A A Joy

RA Ludford

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