Build September 2016

Build Magazine 4 News Hinkley Point C Gets the Go-Ahead: The New Arrangement When the board members of the French electricity provider EDF came to a final decision on 28th July of this year that Hinkley Point would be going ahead with construction, they must have had every confidence in its successful implementation. Unfortunately for them, the subsequent EU referendum happened, and its result proved to be a spanner in the works when the newly-formed government under Theresa May held off giving a final approval – considering that preceding governments, including that of David Cameron, had been so supportive of the project, the Prime Minister’s decision to enter a review process was received with surprise. Today, after an eight-week process, Mrs. May has given the all-important go-ahead to the Hinkley project, but from this process has emerged key details pertaining to a shake-up of the original deal: EDF will not be able to sell its controlling stake in Hinkley Point without government approval, effectively putting a greater degree of control over the project in the hands of the UK Government and Mrs. May. The primary worry that Theresa May’s government seemed keen to address was the 33 per cent ownership of the Hinkley deal by the Chinese government. Concern had clearly been building over this area even before the deal was put on hold – while Britain and France’s EDF were the original partners in the broad commercial agreement back in 2013, China became involved two years later via China General Nuclear Power Corporation (CGN) – the state visit by Xi Jinping that ensued was meant to cement a ‘golden era’ of relations between the UK and China. However, amid concerns over spiralling costs for the Hinkley Point nuclear plant, and especially over the right of the Chinese to build its own nuclear power station – with its own designs – at Bradwell in Essex, Theresa May’s first major action as Prime Minister saw her put the deal on hold. This has caused its own fair share of controversy, with the Chinese government expressing displeasure with Theresa May, and hinting towards the future of Sino-English cooperation, while the ‘golden era’ is still in its crib. At the start of August, the new Prime Minister, barely a month in her new digs, was warned not to drive away Chinese investors. CGN, meanwhile, said on Saturday that it would respect the decision of the new British government to take time in order to familiarise itself with the programme; Xinhua News Agency further tried to alleviate fears of China putting in ‘backdoors’ to the technology used on the project that might present potential threats to UK national security. It is worth mentioning that George Osborne, the previous Chancellor of the Exchequer, was claimed by to have blocked moves intended to provide extra protection for the Hinkley Point installation against such threats. This claim, levelled by the Liberal Democrat ex-Energy Secretary Ed Davey, came after Theresa May, then the Home Secretary, was overruled by Osborne on the matter of relaxing visa requirements for visiting Chinese businessmen. Vince Cable, the former Business Secretary under the Conservative-Liberal coalition government, suggested that May had a “general prejudice” against Chinese investment as Home Secretary, due to concerns over the UK’s national security. However, according to a statement by the official spokeswoman of Theresa May, “the Government has been clear Britain is open to business and wants to be attracting investment from all around the world.” The statement further revealed that the new deal would effectively require a new legal framework, which would be applied to future foreign investment in Britain’s critical infrastructure, and would apply to Hinkley Point as well as all subsequent arrangements thereafter. In the matter of Hinkley Point, the statement clarifies, “existing legal powers, and the new legal framework, will mean that the Government is able to intervene in the sale of EDF’s stake once Hinkley is operational. “Existing legal powers, and the new legal framework, will mean that the government is able to intervene in the sale of EDF’s stake once Hinkley is operational.” Liz Jenkins, Partner at the noted international law firm Clyde & Co, commented on the development. “It’s a shrewd move by the Government to try and replace the existing legal framework with one that allows for more control over ownership of British infrastructure projects. The ‘golden share’ proposal will ensure that significant stakes cannot be sold without the Government’s knowledge or consent. “However, there are still plenty of question marks around the viability of Hinkley, especially given its huge price tag and worries about delays in construction before the project has even begun.” When it comes to headline-making news, the UK has had no shortage of it over these last three months. The first two months of Theresa May’s tenure as Prime Minister has left many with bated breath, anxious to see how the UK will capitalise on new developments; none more so than those with a stake in the thousands of contracts and billions of pounds involved in the heavily prevaricated nuclear power station at Hinkley Point, Somerset. Today, after an eight-week review, the Government announced that the project would be going ahead, with substantial revisions being made to the deal with EDF.