TNAG-1505-FCO40-2063-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 218

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63259

1

GEC'S BID. (FOR YOUR INFORMATION, THE EXTENSIO

OF ECGD SUPPORTED FINANCE TO LOCAL COSTS WAS A

CONCESSION MADE ONLY UNDER STRICT AND DELIBERA

CONTROLS. THE CEILING FOR LOCALS WAS

INTENTIONALLY SET WITH REFERENCE TO THE SO-CALLED

FIRM UK ELEMENT OF GEC'S CONTRACT. THE GEC

CONTRACT ALSO INCLUDES CONTINGENCY ELEMENTS AND

NON-UK ELEMENTS WHICH DO NOT COUNT IN THE

CALCULATION OF THE LOCAL COST CEILING.)

B)

C)

IF PLANT IS TAKEN OUT OF UK SUPPLY FOR MANUFACTURE

IN CHINA, THIS WILL REDUCE THE FIRM UK CONTENT IN

GEC'S BID AND THUS REDUCE THE CEILING FOR FINANCING

LOCALS. SUCH PLANT COULD BE COVERED BY THE ECGD

SUPPORTED LOAN AS A LOCAL COST, BUT THE REDUCTION IN UK CONTENT WOULD MEAN A REDUCTION IN THE TOTAL LOAN VALUE, WHICH WE UNDERSTAND IS UNACCEPTABLE TO

GNPJVC.

OPEN SQUARE BRACKETS IF PRESSED ON WHY CHINESE MANUFACTURE CANNOT BE INCLUDED IN UK CONTENT CLOSE

SQUARE BRACKETS ECGD'S STATUTORY DUTY IS TO

SUPPORT THE EXPORT OF UK GOODS AND SERVICES. ECGD

CANNOT THEREFORE TREAT GOODS MADE IN PRC IN THE

SAME WAY AS THOSE MADE IN UK.

3

WE ASSUME ABRAHAMS OF GEC WILL CONTACT YOU ON HIS ARRIVAL

IN PEKING.

4

THERE REMAINS AN OUTSTANDING CONTRACTUAL PROBLEM BETWEEN

JVC AND GEC WHICH THREATENS CONTRACT SIGNATURE. GEC ARE SEEKING

TO RESOLVE IT WITH JVC IN SHENZHEN. THE PROBLEM RELATES TO GEC'S RIGHT TO SUSPEND THE CONTRACT, WHERE THE JVC IS REFUSING TO ALLOW THE TERMS OF THE CONTRACT TO BE MADE CONSISTENT WITH THE TERMS OF

THE LOAN AGREEMENT, WHICH HAS JUST BEEN INITIALLED. WE ARE

TELEGRAPHING SEPARATELY ON THIS.

5

YOUR INDUS 180. BOTH GEC AND MIDLAND HAVE TELEXED GUEST

LISTS TO YOU TODAY, INCLUDING THEIR OWN PERSONNEL.

HOWE

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