TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 176

6.

7.

8.

Contracts entered into between GNPC and their suppliers

should contain an arbitration clause to ensure a known

procedure to settle any misunderstandings which could arise in the implementation of such contracts.

11.

In the case of Tap Shek Kok, it was noticeable that

though there were considerable differences in the

pricing of each package, the final figure submitted by each of the two consultants for the whole power station was very close.

Since the Bank of China will be called upon to provide certain quarantees it may well be advisable for GNPC

to appoint a representative from that bank to sit on

their board, and to be a member of the negotiating

sub-committee.

12. The procedure I advocate involves detailed and costly

preparation but it saves time and guarantees to the purchaser that the plant he buys will be of the right quality and at the right price in relation to similar equipment anywhere else in the world.

I would strongly advise GNPC to follow the example set

by CLP who, for the last 50 years, have purchased the generating plant they need by negotiation with the fall-

back position of being able to call for international tenders if necessary.

13. To ry mind in all the circumstances applicable to

the project where it is necessary to satisfy the ORC, the Guangdong Provincial Government, the long Kong Government, the British Government, the Government supplying the reactor, the International banka, GPC/CLP and their associates, a negotiated contract is clearly indicated.

9.

10.

This method, though somewhat unusual, has saved CLP a very substantial amount of money.

In the case of CLP's 'A' and 'B' stations at Tap Shek Kok, the procedure adopted was :

a)

DI

to divide requirements into a number of separate but related parcels, and to detail these requirements to the extent that, if necessary, they could be used to call for international tenders. A number of options were provided for;

and

o appoint two entirely separate firms of

nsultants, each of whom was requested to assess

and evaluate, independently, each package and he project as a whole, in relation to world prices for equipment of similar quality.

14.

If the above suggestions related to a direct negotiation are accepted in principle, the following steps should be taken for its implementation :

(1) GNPC acting through PMC will negotiate for the

purchase of a French nuclear island in accordance with the principles reached in Poking in October 1980 between the PRC and the French Government.

(11) GNPC acting through PMC will negotiate the purchase

of a British conventional island with GỆC.

(iii)GNPC acting through PMC will select an architect/

engineer in accordance with the criteria stated under paragraph 3 (xvi) above.