TNAG-1505-FCO40-2063-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 220

CONFIDENTIAL

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GEC REQUIREMENTS ARE COMMERCIALLY REASONABLE AND ARE IN THE

INTERESTS OF BOTH CONTRACTING PARTIES IN THAT THEY HOLD OFF

TERMINATION PROCEDURES AND GIVE BREATHING SPACE FOR RESOLUTION OF

CERTAIN PROBLEMS. THE DRAFT LOAN IS SO WORDED THAT GEC WOULD BE

UNSECURED IN CERTAIN CIRCUMSTANCES UNLESS THE CONTRACT IS AMENDED.

THE ONLY BASIS ON WHICH GEC WOULD FEEL ABLE TO PROCEED WOULD BE IF

ECGD TOOK THE RISK AND WE LIKE GEC ARE UNWILLING TO ACCEPT

UNSECURED CONTRACT RISK ON THE JVC. OUR SUPPORT OF THE PROJECT IS

PREDICATED ON GEC BEING ABLE TO OBTAIN PAYMENT FROM BANK OF CHINA'S

LOAN WHEN THEY HAVE PERFORMED TRANCHES OF WORK. THEY CANNOT BE

EXPECTED TO WORK ON IN CIRCUMSTANCES WHERE THERE IS NO SECURE SOURCE

OF PAYMENT IN PLACE. THIS CAN BE ACHIEVED BY A SUSPENSION, TERMIANATION AND ARBITRATION PROCEDURE. AT PRESENT THE CONTRACT IS

DEFECTIVE ON SUSPENSION.

3. IF NECESSARY WE SHALL TELEGRAM TOMORROW A SPECIFIC LINE TO TAKE.

HOWE

OCMIAN 3310

GUANGDONG

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LIMITED

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FED

NED

TRED

PUSD(MR CROWLEY) WED

P6

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SIR W HARDING

MR DAUNT MR WILSON MR SLATER

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Confidential