CONFIDENTIAL

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WATER

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On April 10 the Government warned about the low storage in reservoirs and announced that the desalter was being put into a state of readiness. Because of the particularly low level of water in HK reservoirs, it was stated that restrictions could be introduced on the Island and outlying islands at the end of that month, with three days notice. An appeal was made for the public to save water. The crucial decision was postponed several times, after China agreed to extend its water supply to the end of August and because of some rainfall yield. The storage situation is still unhealthy. Reservoirs are 44% full compared with 69% last year although full supply can be maintained at least until the end of September. The Government was criticised for not anticipating and providing for the problem on the Island.

Because of the small size of the reservoirs on the Island, it gets two-thirds of its supply from the mainland. Usually the yield of the Island reservoirs is sufficient to supplement the cross-harbour supplies. Nevertheless, measures were initiated early last year to reduce drawoff from Island reservoirs by maximising deliveries of water from the mainland.

underway to boost the cross-harbour feed, with three new pumping stations by 1982 and a further pipe by 1983.

NATIONALITY BILL

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Response that HK people were being made second-class citizens. Fear that HK passport holders would be discriminated against in third countries. Widely if loosely believed that proposed legislation aims to keep out HK's current UK citizens in 1997. Concern over position of those who serve the Crown. Also over nomenclature passports. Feeling that the Bill is another example of UK discrimination against HK. It has focused much media attention on 1997 itself. Two 'concessions' were announced during the committee stage at the beginning of April, i.e. registration of CBDTs after 5 years residence and discretionary citizenship for Crown Servants. Following its passage through the House of Commons, HKG issued a statement outlining its past representations, repeating the latest reassurances given by HMG, and saying it would continue to put forward its views. There was immediate comment by HK Observer chairman and Urban Councillor Denny Huang in the press that the Bill was discriminatory against HK people. Reform Club chairman, Brook Bernacchi said it would make representations to Liberal Peer Lord Lloyd. L.K. Ding, Vice-chairman of Association for the Promotion of Public Justice described the Bill as "obnoxious and racist" and published open letter to Mrs Thatcher and Lord Fenner Brockway, a sympathiser. The Chinese Press reported the various criticisms but generally accepted that the government had

Dr

CONFIDENTIAL

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