May 'had objections to nuke plant deal'

Britain was to sign off on a plan by France's EDF to build two nuclear reactors at Hinkley Point, with financial backing from China General Nuclear. But Mrs May's government has said it will review the project.
Britain was to sign off on a plan by France's EDF to build two nuclear reactors at Hinkley Point, with financial backing from China General Nuclear. But Mrs May's government has said it will review the project.PHOTO: EUROPEAN PRESSPHOTO AGENCY

British PM unhappy about 'gung-ho' approach to Chinese investment, says ex-colleague

LONDON • Mrs Theresa May was unhappy with the "gung-ho" approach her predecessor took to Chinese investment in Britain, a former colleague said yesterday, after the new British Prime Minister cast into doubt a high-profile Chinese-funded nuclear project.

Britain had been due to sign off last Friday on a plan by France's state-owned Electricite de France (EDF) to build two nuclear reactors at Hinkley Point, with financial backing from China General Nuclear (CGN), in a deal championed by former prime minister David Cameron as a sign of Britain's openness to foreign investment.

But just hours before the signing ceremony was due to take place, Mrs May's new government announced that it would review the project, raising questions over Britain's approach to infrastructure deals, energy supply and foreign investment.

"When we were in government, Theresa May was quite clear she was unhappy about the rather gung-ho approach to Chinese investment that we had," Britain's former business secretary Vince Cable told BBC Radio.

"As I recall, she raised objections to Hinkley at that time."

OBJECTIONS RAISED

When we were in government, Theresa May was quite clear she was unhappy about the rather gung-ho approach to Chinese investment that we had... As I recall, she raised objections to Hinkley at that time.

MR VINCE CABLE, Britain's former business secretary.

Britain and EDF first reached a broad commercial agreement on the Hinkley Point project in 2013, while the Chinese involvement was sealed two years later, when London laid on a state visit for Chinese President Xi Jinping, designed to cement a "Golden Era" between the two countries.

The about-turn came little more than a month after Britons voted to leave the European Union in a referendum that forced the resignation of Mr Cameron and the promotion of Mrs May.

In the weeks that have followed, Mrs May has been keen to state that Britain remains open for business. But she has also said that the government should be able to step in to defend a key sector from foreign ownership if necessary.

Potential security risks have been cited as a concern about the project in some quarters.

Last year, Mr Nick Timothy, who worked closely with Mrs May in the past and is now her joint chief of staff, raised concerns about Chinese involvement in Hinkley.

He said security experts were worried that the state-owned Chinese group, which owns a stake of about a third in the project, would have access to computer systems that would allow it to shut down Britain's energy production.

The two new reactors at Hinkley Point in south-west England would provide about 7 per cent of Britain's electricity, helping to fill a supply gap as coal plants are set to close by 2025.

Although EDF and CGN are responsible for the £18 billion (S$32 billion) cost, Britain has committed to pay a minimum price for the power generated by the plant for 35 years.

Critics say the country would be overpaying at that minimum price, which equates to double the current market levels.

Any attempt to renegotiate the terms could strain ties between London and Paris, at a time when Britain is starting to renegotiate its exit from the EU.

The state-controlled utility EDF, which itself had to come through a bruising boardroom battle last Thursday in order to secure backing for the project, said it had not been given any advance warning of the review but was ready to start work.

CGN said yesterday that it respected the decision of the British government to take the time needed to familiarise itself with the programme.

A decision is now due by the autumn, meaning that it could come in September, when the government is also due to give the go-ahead to a plan to expand either Heathrow or Gatwick airport - another major infrastructure project that has been delayed.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on July 31, 2016, with the headline 'May 'had objections to nuke plant deal''. Print Edition | Subscribe