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On January 23, EDF announced that the Hinkley Point C nuclear power plant project in the United Kingdom, which was built by the company, had fallen into a state of overrun due to the continuous rise in labor and building material prices.
The construction of the first nuclear reactor is expected to be postponed from 2025 to 2029.
According to relevant agency estimates, if the Hinkley Point C nuclear power plant project is really to be completed in 2029.
The total cost would then soar from £18 billion to £46 billion, a bottomless pit of dissatisfaction.
Faced with the current financial and budget-critical situation at Hinkley Point C, the UK government has acted like it doesn't care about itself and insists on refusing to fund the project.
At the end of 2023, after the China General Nuclear Power Group of the mainland settled the contract and withdrew, why did the British media collectively "break the defense"? How will the Hinkley Point C nuclear power plant project develop in the future?
1. The British nuclear power project has been postponed again
In 2015, the UK government launched a move to reduce fossil fuel consumption and meet the country's growing electricity demand.
Approved the agreement between the Chinese consortium led by China General Nuclear Power Corporation and EDF for the joint construction of new nuclear power plants.
According to the contract, the initial estimated cost of the Hinkley Point C nuclear power plant project in the UK is 18 billion pounds, and the mainland company expects to invest a total of 6 billion pounds to own a 33.5% stake in the project.
In fact, the UK was the first country in the world to have a commercially operating nuclear power plant.
The choice to approve the new nuclear power plant between the Chinese consortium and EDF was motivated solely by political and economic considerations.
In other words, given the current domestic political situation and financial ability of the UK, it is simply impossible to smoothly promote the implementation of new nuclear power plant projects.
Although both the Chinese consortium and EDF have put a lot of effort into the Hinkley Point C nuclear power plant, the project has been delayed several times since it officially started construction in 2017, and the cost issue has always been a major issue between countries.
International emergencies such as the new crown epidemic and the Russia-Ukraine conflict have exacerbated the inflation crisis in Europe.
Coupled with the severe impact of Brexit on the country's economic system, the construction cost of the Hinkley Point C nuclear power plant can be described as rising.
It is reported that since the start of the project in 2017, the budget cost of the Hinkley Point C nuclear power plant has risen from £18 billion to about £35 billion.
Even the £46bn costing is likely to be a conservative estimate now, with the project potentially delayed to 2031 eventually.
In addition to the cost of the project, another major obstacle to the tripartite cooperation between China, the UK and France is the British side's prejudice against Chinese companies.
The so-called business cooperation in the mouth of the British side is actually that it wants both the capital and technology of Chinese enterprises, but it is unwilling to pay.
Since the start of the nuclear power plant project, the UK has repeatedly used far-fetched reasons such as "national security" and "China threat theory" to squeeze out Chinese companies.
The ultimate goal is to drive Chinese companies out of the nuclear power plant project.
As one of the countries of the Five Eyes Alliance, the United Kingdom has long been in line with the United States in its political stance.
It seems that even when it comes to their own core interests, British politicians still want to pursue their so-called political correctness, but the UK today is not the "empire on which the sun never sets".
Second, the logic of throwing the pot against the French bandits
EDF has now completed its nationalization reforms, following the announcement by a Chinese consortium led by CGN that it would stop paying overruns for nuclear power plant projects.
The French government will never allow EDF to take on potentially billions of pounds in debt for construction projects in other countries.
It is reported that at present, the mainland's China General Nuclear Power Group has settled the agreed share of capital contribution in accordance with the provisions of the contract, and will subsequently refuse to pay a penny for the overrun of the project.
After the Chinese company announced its withdrawal and the Hinkley Point C nuclear power plant project faced an overrun and delay, the Financial Times published an intriguing report: "After settling the contract share, CGN refused to pay for the overrun of the nuclear power plant." ”
The translation of this sentence means that Chinese companies should continue to pay for the overruns of the project.
In fact, when the Chinese consortium led by CGN signed an agreement with EDF, the terms of the cessation of payments were clearly stipulated.
Now, even EDF has confirmed that the overrun budget for the current project construction has reached the threshold of the contract, and the Chinese company is not obliged to continue to bear the relevant construction costs.
The French side will not be in a hurry about non-national projects, and the mainland will not pay for overspending the budget.
However, for the United Kingdom, which is in dire need of power generation facilities, the stagnation of nuclear power plant projects will undoubtedly seriously affect its normal economic and social development.
Over the years, the UK government has had a lackluster performance in public services and infrastructure development.
Recently, there have been a series of government bankruptcies in China, and the mutual tilting between political parties has exacerbated the political internal friction within the British government.
Recently, a British politician shouted: "British taxpayers will not pay a penny for the project, and the increased costs should be borne entirely by shareholders." ”
Brits from politicians to the media seem to be trying to emphasize one thing: that the increased costs of business partnership projects should be borne by shareholders.
However, they seem to have forgotten that it was they who had squeezed out the Chinese companies in the first place.
At present, the overall construction cost of the Hinkley Point C nuclear power plant project has far exceeded the amount stipulated in the contract.
The British themselves do not want to pay for it, but they demand that other countries pay for the overspending budget, which is simply a blatant double standard.
The British media ignored the terms of the contract and imposed its self-consistent bandit logic on Chinese enterprises.
It will only let the world really see its ugly face, but it is just "over the hook" but it will not fill the funding gap of the project.
Third, the British side has stalled the project
Compared to the efforts of the Chinese consortium and EDF, the British government has become the most "flat" party in the whole cooperation project.
Even if the Hinkley Point C nuclear power plant is a purely commercial cooperation project, shouldn't the government take a high level of attention to the country's nuclear safety and the electricity needs of about 6 million users?
There is nothing wrong with the government prudently approving fiscal allocations, but it is the biggest irresponsibility to domestic taxpayers to ignore the need for public infrastructure construction under the pretext of so-called non-government projects.
Whether the Hinkley Point C nuclear power plant can quickly resume the project depends on whether the British government can change its attitude.
Of course, CGNPC's initiation of the settlement process does not mean that it has completely waived its equity in the project.
The Chinese consortium, led by CGNPC, has only announced its withdrawal from the infrastructure project at Hinkley Point C.
If the Chinese enterprise complies with the agreement and settles the payment share, it should receive the equity share stipulated in the contract.
As the UK government has stated, Hinkley Point C is an unofficial commercial partnership, even if the construction of the project is overspended.
It will not be profitable in the short term, and the UK government has no right to infringe on the legitimate interests of Chinese companies in the project.
From a practical point of view, the Hinkley Point C nuclear power plant project will only get more expensive after Chinese companies announce that they will stop making related payments.
If the government continues to play badly, it will only end up putting its economy in trouble.
Originally, the project has been regarded as a benchmark for trilateral cooperation between China, France and the UK, but now that it has made such a scene, it can be regarded as allowing the world to see how some Western countries advocate the "spirit of contract".
4. Respect the agreement and defend rights
Since the start of the project, mainland enterprises have always strictly complied with the relevant obligations bound by the contract.
At the same time, we also see this cooperation as an "ice-breaking cooperation" with European countries in the field of nuclear power infrastructure.
Even if the project has been postponed due to subjective factors many times, the Chinese consortium has unreservedly provided all necessary facilitation conditions for promoting the construction of the project, but the partners do not appreciate it.
In this cooperation, we did not see the spirit of contract that is highly respected in Western countries.
Rather, I have seen the arrogance and prejudice arising from ideological differences, and the construction of nuclear power plant projects is not child's play, and how can we talk about efficiency and quality of multilateral cooperation mixed with political factors?
Of course, due to the delay in the completion of the Hinkley Point C nuclear power project, it will be difficult to recover the investment made by the Chinese consortium in the early stage.
However, the project can be afforded by France and France, but not necessarily by the British, and in the meantime they may have to use British taxpayers' money to fill the shortfall in the cost of nuclear power plants.
I believe that many friends will be worried that once the Hinkley Point C project is completed and put into production, will the initial investment of Chinese enterprises be wasted?
In fact, EDF recognizes the so-called stop payment threshold for Chinese enterprises.
It means that after the project budget exceeds a certain limit, the Chinese enterprise can refuse to bear the share of the project overrun without responsibility, which does not mean that the investment share stipulated in the contract is invalid.
Moreover, the Chinese consortium has settled the payment share in the contract last year, which is in line with the terms of the previous agreement.
If external forces want to encroach on the legitimate rights and interests of Chinese enterprises under the pretext of overspending and postponement, we will resolutely fight back.
summary
It is not surprising that the Chinese consortium has once again fallen into a state of overrun postponement after the Chinese consortium announced that the project would stop paying the overbudget for the Hinkley Point C nuclear power project.
However, the British government's sloppy attitude and arrogance towards major infrastructure projects in the country are really staggering.
EDF has confirmed that the Chinese consortium has settled its share of the contract and is not required to pay for the project overruns.
However, the British media's yin and yang towards Chinese companies has smashed the signboard of Western countries respecting the spirit of contract.
At present, EDF will not be burdened with debt for infrastructure projects in other countries until it finds a new infrastructure investor.
And the only one who can really save the Hinkley Point C nuclear power project seems to be the British government itself. Of course, no matter who takes over the infrastructure of the Hinkley Point C nuclear power project, the legitimate rights of the Chinese consortium enterprises to comply with the agreement must be guaranteed.