TNAG-1503-FCO40-2061-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 137

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59433 1

WE MUST BE PREPARED TO ENVISAGE CONTRACT SIGNATURE AT LEAST A FEW DAYS BEFORE 7 OCTOBER. WE THEREFORE SUGGEST THAT YOU MIGHT REFER

TO THE IMPORTANCE OF NOT SIGNING THE CONTRACT UNTIL ABOUT END OF

SEPTEMBER RATHER THAN AS NEAR AS POSSIBLE TO 7 OCTOBER. THIS

TIMESCALE IS CONSISTENT WITH THAT MENTIONED BY THE AMBASSADOR ON

29 AUGUST. 4.

YOU AND THE AMBASSADOR SHOULD BE AWARE THAT THERE ARE STILL TWO PROBLEMS OF PRINCIPLE OUTSTANDING IN THE LOAN AGREEMENT NEGOTIATIONS ON THE BRITISH SIDE, RELATING TO THE BANK OF CHINA'S

ACCEPTANCE OF INDEPENDENT ARBITRATION AND ITS RIGHT TO WITHOLD

DRAWINGS FROM THE LOAN IN CERTAIN CIRCUMTANCES. ECGD HAVE BEEN INVITED BACK TO SHENZHEN FOR NEGOTIATIONS FROM 7-10 SEPTEMBER, BUT WE DO NOT REGARD AN EARLY RESOLUTION OF THESE ISSUES AS LIKELY UNLESS THE CHINESE BACK DOWN. THE PROGRAMME COULD

THEREFORE STILL SLIP FOR REASONS UNCONNECTED WITH HONG KONG.

HOWE

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