TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 241

CONFIDENTIAL

RAFT MINUTE FROM THE SECRETARY OF STATE FOR INDUSTRY TO THE

PRIME MINISTER

GUANGDONG NUCLEAR PROJECT

1.

In the light of Michael Jopling's report to you of his conversation

with Lord Kadoorie in Hong Kong you asked for an assessment of the situa-

tion on the Guangdong project (John Cole's letter to Caroline Varley of

19 January). A background note is attached at Annex A: the principal

issue for consideration at present is whether we should choose to work

in partnership with the French or the Americans.

2.

You may recall that in February 1981, against the background of

the final discussions on the Castle Peak B station in Hong Kong and

the need to give particular weight at that time to the views of Lord

Kadoorie, colleagues agreed that GEC should enter into an agreement

with the French nuclear supplier, Framatome. In the event, it proved

possible to gain the Castle Peak contract without entering into a firm

arrangement. The French for their part have since been content to

stand back from any firm commitment.

In the interim, in the absence of

any clear indication that China will go forward with the project in

the near future, it has been possible to take forward the alternative

possibility of collaborating with Westinghouse.

3. As discussions now stand the likely shape of the package which

would emerge with either partner would be broadly as follows With the

French, Framatome would supply the nuclear island and the fuel supply

while the UK would provide the conventional turbine island and a pro-

portion of the transmission network. In addition the UK might take

responsibility for the overall project design and management depending

on which partner took the lead. We would of course press the French

hard for a larger UK share but