TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 42

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Mr.Grifford,

Mr. Ronald,

Mr. Gillmore,

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MON

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10 DOWNING STREET

From the Private Secretary M. Hoare

TRED, WED NAD

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No

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66/1

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30/11 Pas 30/4

26 November 1982

(67

GUANGDONG NUCLEAR PROJECT

The Prime Minister has seen the minute of 25 November by the Secretary of State for Industry..

Mrs Thatcher agrees that at the final meeting which

Mr. Jenkin will be having with Mr. Li Peng today we should offer full capitalisation of interest instead of the concession we have already made on the financing of local costs. She notes that the Treasury and ECGD are content with this proposal.

The Prime Minister does not consider that we should offer local cost support in addition at this stage. But she would be willing to examine this possibility if, at a later stage, Mr. Jenkin thought it necessary to secure the contract for the conventional island.

I am copying this letter to John Holmes (FCO), John Kerr (HM Treasury), Julian West (Department of Energy), John Rhodes (Department of Trade), John Gieve (Chief Secretary's Office, HM Treasury) and Richard Hatfield (Cabinet Office).

Ms Caroline Varley, Department of Industry.

A J. COLES