CONFIDENTIAL
COMPETITION
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The front runners in the competition for the project are the French and the Americans. Each is technically capable of supplying both the conventional and nuclear islands and has a proven track record in the construction of PWRs both for the domestic and export markets. The UK by comparison has no PWR experience and GEC have not supplied any large high speed turbines for PWRS before. The ability of the Americans to supply the nuclear core for the project is, however, strained by difficulties under the Non-Proliferation Act. It is because of these difficulties in the direct export of nuclear technology to China that Westinghouse are interested in working through NNC.
Discussions with Eximbank have indicated that they envisage terms for their loans of 11% interest over 15 years for 85% of the US components. Eximbank have also indicated that they would be willing to consider giving a guarantee for local costs and capitalisation of interest funded in the commercial market. However, Exim have stressed that they cannot give detailed commitments until the State Department's deliberations are completed.
Following a visit by President Giscard d'Estaing in 1980, the French appeared to have established a favoured position in Peking. It was widely understood that at that time the French had secured an agree- ment in principle that France would be the preferred supplier of the nuclear island. However there have been signs recently that this commitment is weakening and that the Americans are now the favoured nuclear vendor.
The formal position of the French is that a loan at 10% interest over 15 years would be their maximum offer although they would be willing to consider giving a supplier credit offer at 7%, to be refinanced at , a higher rate of interest. However, our experience of the French
suggests that they will offer a very competitive package to the Chinese.
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