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vil: of the feasibility report (paragraph 5(d) above). However, by the time the feasibility report reaches the Government, KEC's ideas on the location of the site for the project (a key issue in relation to environmental and safety matters) will be far advanced and it is doubtful whether at that stage representations by the Hong Kong Government would be effective. Furthermore, by the time the feasibility report was submitted, it would be too late to seek answers to queries on environmental and safety matters that are of concern to Hong Kong. It is intended, therefore, that an arrangement should be sought whereby the Hong Kong Government may be informed of, or perhaps even involved in, the deliberations of the CLP/ KEC Site Investigation and Selection Working Sub-Committee on a continuing basis. The Government would probably have to draw on the advice of a UK nuclear inspector in order to be satisfied on safety aspects.

26

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In the context of environmental and safety considerations, the recent Kemeny report on the Three Mile Island muclear plant incident in Pennsylvania is relevant. This noted, inter alia, that "We are convinced that if the only problems were equipment problems, this Presidential Commission would never have been created. The equipment was sufficiently good that, except for human failures, the major accident at Three Mile Island would have been a minor incident. But, wherever we looked, we found problems with human beings who operate the plant, with the manage - ment that runs the key organisation, and with the agency that is charged with assuring the safety of nuclear plants". This conclusion was reached in connection with a nuclear power plant located in a country with much. direct experience of all aspects of this particular technology and which has a generally high level of technical competence in its work-force and control organisations. Although KEC are said to have been impressed by CLP's management capability (see paragraph 7(b)) it must not be overlooked · that CLP has no experience of building or operating nuclear generating stations and nor has KEC. In these circumstances the comments in the "Kemeny" report point-up the need for extreme care in relation to the siting of the proposed plant and to environmental and safety matters besTO generally.

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Public reaction

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The proposed project, if it materialises, would be seen as having long term potitical significance for the future of Hong Kong, and in this respect would be welcomed by the community. However, in view of the proximity of the proposed plant to Hong Kong, the public will certainly be concerned about the environmental and safety implications, particularly the possible effect on Hong Kong in case of an accident. Such concern has already been expressed when the last round of talks was reported in the press recently.

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CONFIDENTIAL #2

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