- Created on Monday, 20 August 2012 15:54
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Chinese companies competing for one of the UK's biggest nuclear projects are unlikely to end up with a majority stake in any winning consortium in an attempt to allay concerns about Beijing gaining control of the Horizon reactor programme.
Chinese nuclear companies have joined groups hoping to take ownership of the project, which was put up for sale earlier this year by its current joint owners, German utilities Eon and RWE. The deal represents a big test for large-scale Chinese investment in UK infrastructure projects given the sensitivities surrounding the nuclear industry.
Several people familiar with the sale process said UK officials had signalled a preference for the two competing consortiums' Chinese partners to be minority investors in the project. Restricting their stakes could be difficult, however, particularly as the billions of pounds in funding needed to build the plant will most probably come from Chinese-backed lenders.
"It has always been understood that the Chinese could not have more than 50 per cent, for reasons of public acceptance and political acceptance," said one person familiar with deliberations at the UK energy department.
UK officials insisted the government had no "fixed view" over the final shareholding mix of any bidding consortiums, saying the deal was a matter for Eon and RWE.
Similar concerns have complicated deals involving Chinese state-backed companies in the US and Europe, especially in the energy and telecommunications sectors. After the Fukushima nuclear disaster in Japan and Germany's decision to phase out its nuclear plants, the UK is one of the few developed economies aggressively pursuing new reactor projects.
"Using a communist-backed, state-owned Chinese company will create major security concerns," said Mark Pritchard, a Tory MP and member of the parliamentary joint national security committee. Simon Hughes, a prominent anti-nuclear Lib Dem MP, agreed there were "sensitivities" about Chinese involvement but argued it would be wrong to treat Beijing's companies differently from others: "You can't apply different rules to certain countries if they are complying with the relevant requirements."
Horizon plans to build reactors at Wylfa in Anglesey and Oldbury in Gloucestershire. At least two consortiums are working on bids in a deal expected to be worth about £500m.
The first is led by Toshiba Westinghouse, the Japanese-owned reactor manufacturer, in partnership with State Nuclear Power Technology Corp of China and Exelon, the US power generator. The second group comprises Areva, the French state-controlled reactor manufacturer, with China Guangdong Nuclear Power Corp, another Beijing-controlled entity. GE Hitachi is also understood to be interested in Horizon. Final bids are due by the end of September.
George Osborne, chancellor, has been urging Chinese investors to back British transport, energy and utility projects. Earlier this year China's sovereign wealth fund bought a 9 per cent stake in Thames Water.
Source - CNN