TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 148

CONFIDENTIAL

DSR IIC

BACKGROUND AND ARGUMENT

The Case for Supply

1. The project would involve the construction of a

2 x 900 MW PWR nuclear power station in Guangdong province

adjacent to Hong Kong. It would provide much needed work

for GEC for the conventional island; NNC and Westinghouse

for the nuclear island; and for British Nuclear Fuels Ltd.

One of the Hong Kong utilities, China Light Power Co Ltd.,

would be closely involved in the management of the station.

They would also buy power from the station, thereby generatinĮ

the foreign exchange necessary for the repayment of

international loans. Total hardware and fuel costs might be

in the region of $3 billion, of which the UK would gain

the whole of the conventional island, up to 60% of the

nuclear island, associated transmission lines and some

nuclear fuel. This could be worth up to US $2 billion.

[Paragraph by FED/HKGD on the potential benefit to

[The station should

2.

UK/PRC and PRC/HK political relations]

start operating by the early 1990's and have a useful life

of about 25 years].

US Attitude

3. The proposed contract would be dependent on US

Government approval for the sale of US-designed nuclear

equipment, even though the bulk of it would be manufactured

outside the US. The US Government have already indicated

to Framatome that they would not seek to prevent the

CONFIDENTIAL

/transfer