Officials of this Department have recently had informal discussions on this subject with Mr. Bennett, the head of our Atomic Energy body which are summarized in the attached letter of March 21 from Bennett to Ritchie. From these talks, it seems evident that some activity in this field (including possibly the establishment of a reactor in India) would now be practicable and would have a good deal of attraction for both our atomic energy authorities and for competent Canadian firms which might undertake the work. Not only would such a project appear imaginative and dramatic to the people of Asia - and of Canada - but the point would seem to have been reached at which it could be of very great practical value to both the Asians and ourselves.

2. Despite the very preliminary character of the conversations which have taken place so far, I think it desirable to bring this matter to your attention at this stage in case you might wish to have a word about prospects with Mr. Howe before he leaves for Australia on April 8 and in case you might think it desirable to have Mr. Reid explore the possibilities with the Indian authorities before he leaves New Delhi early in April.

3. From a general political of view, we in this Department have, of course, been impressed for some time with the desirability of making arrangements which would enable the West to cooperate with friendly Asian countries in developing atomic energy for peaceful purposes. Such action might be particularly helpful in countering the impression which is apparently widespread in Asia that the West's only interest in this field is to develop what are regarded as fiendish devices of destruction. The need to counteract this view of our motives has not diminished with the circulation of rumours that the Soviet Union is helping China in the development of atomic energy for constructive uses or by the current fears of many Asians that the first post-war use of atomic weapons by the West might be against Asian populations.

4. The eventual practical importance of atomic energy for the economic development of the Asian countries which are generally so deficient in other energy resources has also frequently been emphasized. In competition with other sources, atomic energy may well be economic in such power-starved countries before it becomes a commercial proposition here. If the people of those countries are to prepare themselves to take advantage of the possibilities of this form of energy in the reasonably near future, it is important that the groundwork should be laid soon, and in the case of those countries which have already commenced on a modest scale (such as India) the process should be accelerated.

5. There seems little likelihood that an effective international agency concerned with peaceful applications of atomic energy will come into being for some time. Meanwhile, it would appear that it is being left to each Western country to determine what it might best do, within the limits of current security considerations, and possibly with a view to the need to fit any such arrangements in with the operations of whatever international agency is eventually established. As you doubtless know, the United States authorities are already making arrangements to receive a considerable number of trainees from various underdeveloped countries at their reactor schools. Similarly, the United Kingdom is apparently providing certain training facilities at Harwell. There have also been indications that the U.S. and U.K. might be contemplating the establishment of one or several reactors in the Asian region. Attempts are apparently also being made to interest the International Bank, possibly in association with some U.S. or U.K. group.

6. In the view of our atomic energy people, it would be most undesirable, especially from the longer-term commercial point of view, for us to lag behind. In addition to the general political considerations mentioned previously, there would seem to be very substantial reasons why Canada might be particularly well placed to take some initiative. The most important of these is probably the fact that some of the Asian countries, particularly India, might find it less difficult and less embarrassing to receive direct assistance from us in this rather delicate field than from either of the larger atomic powers whose motives might be questioned by groups in India as well as by other Asian countries.

7. In view of the nature of our operations at Chalk River, it is not possible for us to help them by introducing a significant number of Asians for training there. In any event, it is doubted that such training (which inevitably would be somewhat diluted) on reactors in Western countries could be nearly as effective as the actual management of a reactor in building up the body of knowledge and of experienced personnel which will be required if the Asian countries are to make substantial progress in this field over the next decade or so. In this connection, it is interesting that the Australians, who have more ready access to training facilities abroad than the Asians are likely to have for some time to come, have decided to acquire a research reactor of their own rather than to depend entirely on the training available to them overseas.

8. The security obstacles to the provision of a reactor to a country such as India would apparently not be serious. If the reactor were to be of the NRX type now operating at Chalk River, there would apparently be no significant security problem. About the only aspect of our NRX project which continues to be classified is the performance data. There might also be some problems to be resolved regarding control over the plutonium produced by any reactor which we might supply, but this presumably could be surmounted, especially if we assume that one way or another a country like India will acquire a reactor from some source (friendly or otherwise) and will be producing this material.

9. In addition to the decline in importance of security considerations, the main factor which has more or less suddenly made such an atomic project under the Colombo Plan seem promising is the active interest - almost enthusiasm - being shown by our atomic energy people and by a considerable number of Canadian firms. As implied above, it is evident that before very long the development of atomic energy and related products is going to become - if it has not already - very keenly competitive. Our technical people and our firms are anxious to gain some experience in order that they may be able to meet such competition in Canada and probably also in foreign countries. When, recently, several Canadian firms were approached concerning the building of a power reactor in Canada, the response was remarkable. Canadian General Electric, Westinghouse, Canadair, A.V. Roe, John Inglis, Dominion Bridge, and some others indicated that they were very nearly prepared to take on that contract at a loss in order to get themselves established in this field. While one or two of these firms will, no doubt, become involved in our own power project and will therefore be too pre-occupied to take on a job elsewhere, the remaining five or six firms would almost certainly be interested in any atomic project which we might sponsor in Asia. For the purpose of strengthening their competitive position for subsequent commercial activities, certain of these firms might feel that such a project abroad would be even more attractive than the one in Canada, since much of the future market may lie in the more difficult overseas countries rather than in Canada where alternative sources of power are available.

10. The conversations with our atomic energy people have not, of course, covered all the details since it seemed unwise to carry this matter very far before Ministers had had an opportunity to consider whether or not it was a starter. In general, however, it might be said that we have been thinking tentatively in somewhat the following terms:

(a) Canada might supply a reactor to India under the Colombo Plan. (India would seem to be the logical location for such an installation since the basic level of scientific knowledge is rather higher there than in most of the Asian countries and at least the nucleus of an atomic energy establishment now exists there.);

(b) the arrangements with the Indian authorities would be such as to avoid any fears or suspicions on the part of neighbouring Asian countries and, if possible, an understanding might be reached that trainees from nearby Asian countries would be brought into the project in order that they, too, might acquire at least some experience in the operation of a pile under local conditions;

(c) the reactor to be supplied might be of the NRX research type rather than a power reactor - although we gather from our atomic energy people that it might conceivably be possible to proceed with a power reactor in India at the same time as we are constructing our own reactor for power purposes;

(The preference for a research reactor is based primarily on the simple principle of learning to walk before attempting to run. An additional factor, which Ministers can best judge, is the possible reaction in Nova Scotia to the provision of a power reactor to India on generous terms when one was being refused to Nova Scotia. This latter factor might not be regarded as determining since, in fact, we have been providing hydro-electric generating plants to Asian countries under the Colombo Plan while refusing Federal assistance to similar power developments in certain Canadian provinces.)

(d) the atomic energy authorities here would be responsible for supplying the necessary drawings and technical assistance to the Canadian construction firm concerned and providing a certain amount of training for Asian personnel who would be responsible for operating the reactor in India;

(e) the Canadian construction firm would be expected to build the structures and instal the equipment at the site in India, presumably under supervision of experts from our Atomic Energy Board and from the Indian research establishment;

(f) on the basis of experience at Chalk River, it would appear that such a research reactor could probably be set up for about $15 million;

(Although prices have gone up considerably since our reactor was constructed, it is believed that such increases in costs as this might involve would be more than offset by the economies which could be made as a result of the fact that we could draw on our previous experience and would not have to proceed by the trial and error methods which had to be relied upon then. If we were to take responsibility for the townsite as well as for the reactor, the total costs would, of course, be higher - possibly by as much as $10 million - but, since the provision of such accommodation might be regarded as an Indian Government responsibility, in accordance with our normal Colombo Plan practice, it is probably not necessary to contemplate the use of Canadian funds for this purpose.)

(g) although the uranium metal required for the operation of a reactor of this kind is not at present available in Canada, it is considered that we might be producing it by the time the reactor would be completed or that no serious difficulty would be encountered in procuring it from other sources at that time;

(h) simultaneously with such activity in India, it might be possible for us to undertake certain more limited atomic energy projects, primarily of a medical character, in other Asian Colombo Plan countries.

(For example, we might find it practicable to meet a request which we have had from Burma for a beam therapy unit and might be able to provide training in the handling of isotopes to other Asian personnel if such knowledge could be used to advantage.)

11. If we were to contemplate going ahead with such activities, consideration would, of course, have to be given to the question of whether additional money could be added to the Colombo Plan Vote for this purpose next year (or in the Supplementaries later this year), or whether work in this field could be undertaken only at the expense of some of the more conventional Colombo Plan projects which have been submitted to us. In this connection, you will doubtless realize that the more ordinary types of projects which are being put forward by the Asian countries are mounting in number and in size. It would seem quite evident already that there will be more than enough of such projects to absorb the same amount of money next year as has been included in our Estimates for the current year. Since many of these projects would yield pretty substantial returns for the Asian countries concerned within a fairly short period, it would seem a pity to sacrifice them in order to start some work in the atomic energy field which inevitably would take a longer time to show tangible results. At the same time, it would seem regrettable to miss an opportunity to make a start in the field which is so important politically now and which can have such great importance for the future. It might be best to leave this difficult question unresolved for the time being and to touch upon it only indirectly in any consultations with the Indian authorities.

12. If you agree that the possibilities of an atomic energy project under the Colombo Plan should be investigated further, as a matter of some urgency, perhaps you would wish to have a word with Mr. Howe before he goes off to Australia. We have mentioned our interest at the official level in this subject to some of his officials (e.g., Mr. Bull and Mr. Sharp), but we understand that they will not pursue the matter with their Minister unless and until you raise the question with him. Since we understand that Mr. Bennett has not discussed the subject with Mr. Howe either, you might wish merely to indicate that, since you had gathered that there was probably an increasing interest from a technical and commercial point of view in the construction of a reactor in India under the Colombo Plan, you wished to let him know how beneficial you thought such a project would be in terms of our general relations with Asia. You might even wish to urge him to have a word concerning the possibilities with Mr. Bennett before he leaves for Australia in order that the matter might be looked into during his absence. You might add that, if he would be agreeable to having the question explored, you would propose to have Mr. Reid raise it informally in the course of his conversations with senior Indians when he is taking his leave of them before returning home.

(You will know best whether it would be desirable to mention this subject as well to any other Ministers, for example, Mr. Harris. We have not gone into it in any detail with officials of such other departments, although I should say that we have referred to our interest in the possibilities in the course of conversations with Mr. Deutsch, Mr. Plumptre and Mr. Rasminsky and have found them all personally responsive to our very tentative and general suggestions.)

13. If, following on any conversation which you might have with Mr. Howe, you felt that Mr. Reid should sound out senior Indians (including possibly Mr. Nehru and Mr. Deshmukh), we might instruct him on the following lines (recognizing that, as indicated in the attached letter from Bennett, the possibility of such a project outside the Colombo Plan may by then have been raised in correspondence between Dr. Lewis and Dr. Bhabha):

(a) in the course of his leave-taking calls, he might intimate confidentially to the Prime Minister and to other senior Ministers and officials concerned that on his return to Canada he proposes to explore with the Canadian authorities the possibilities of an atomic energy project;

(b) he might express the view that at this stage any such assistance could probably most practicably and usefully take the form of a research reactor. (In this connection, he might refer to the public reports that Australia has apparently concluded that such a reactor would be the best way of promoting its development of atomic energy.);

(c) he might enquire how interested the Indian authorities would be in this type of assistance and in particular whether, if that should prove necessary, they would give a higher priority to such a reactor than they would to some of the projects which they have already submitted to us. (Mr. Reid might express the opinion that a reactor of the kind he had in mind would cost about $15 or $20 million, in order to give the Indians some measure of the effect which acceptance of this project might have on other aid expected from Canada.);

(d) he might conclude by asking whether, if such a reactor were to be provided, the Indians would be willing to share its use in some manner with trainees from other Asian countries in order to spread knowledge in this field as widely as possible with a view to facilitating the constructive application of atomic energy to the problems of economic development in Asia in the shortest possible time.

14. If Mr. Reid's soundings are carried out, and if they show a fairly receptive attitude on the part of the Indians, it would then presumably be desirable (and we gather from Mr. Bennett that it would be practicable) to have a qualified senior official from our Atomic Energy Board visit India for more intensive exploratory discussions.³⁴

J. L[éger]

Confidential
Ottawa, March 21, 1955

Dear Mr. Ritchie

Further to our recent conversation I have now explored with our people at Chalk River the possibility of Canada undertaking the design and construction of a research reactor for India under the Colombo Plan.

I find that we have available a complete set of plans and specifications for the NRX reactor. While some modification of specifications might be warranted in the light of our experience with the operation of the NRX these would not involve a major effort in design and engineering. The changes in specifications could be carried out by a manufacturer with technical advice supplied by Chalk River.

My suggestion that a research reactor of the NRX type would be of interest to India is based on my information that Dr. Bhabha, the Chairman of the Atomic Energy Commission of India, is anxious to build up a strong scientific team as a preliminary to the development of atomic power for use in India. Our experience shows clearly that the training of scientists and engineers in the field of atomic energy can best be achieved through the operation of a research reactor. The NRX reactor was designed for this purpose and has proved to be the most useful research reactor of any now in operation. In this regard you may be interested in a statement which was made recently by Dr. Lawrence Hafstad, the former Director of the Reactor Development Division of the United States Atomic Energy Commission. In the course of an appeal to American industry to participate more actively in the development of satisfactory fuel elements for power reactors, Dr. Hafstad had this to say:

"In order to do this, one of the tools you ought to have is what we would call a fuel element testing reactor. It is pretty generally known in the business that we have an excellent research reactor in the materials testing reactor (MTR). In order to get the very high flux that reactor has, it was so designed that none of the holes available for testing samples is large enough to accommodate a full-sized fuel element. We have been depending upon the good nature of our northern neighbour, Canada, to test full-scale fuel elements in her NRX reactor. This has been going on for years."

As I pointed out in our conversation, the design of the NRX reactor has been declassified. Consequently, there should be no security problem. The NRX reactor uses heavy water as a moderator and natural uranium, in the form of metal, as a fuel. I understand that India is now considering the construction of a heavy water plant. If this goes forward India would be in a position to supply the heavy water requirements of the reactor from its own resources. As an alternative heavy water could probably be purchased from the United States which will shortly be in a surplus position on this item. While Canada is not producing uranium metal, the Research and Development Division of Eldorado [Nuclear Limited] is now studying the economic feasibility of metal production. The volume of uranium production in Canada is rapidly reaching the point where we believe it would be economic to produce our own metal. I should think that there is a strong possibility that we would be in production at such time as India would have a requirement.

As you are aware, we recently invited proposals from Canadian manufacturers on the design, engineering and construction of a demonstration power reactor. All of the companies involved have shown a very real interest in the project. The degree of interest may be gauged by the fact that each of the seven companies invited to bid has offered to make a substantial financial contribution to the cost of the reactor. It is evident that some of these companies are anxious to get into the game even if their proposal for the demonstration power reactor is not accepted. I think it very probable that these companies would be interested in submitting proposals on a research reactor for India. Since plans and specifications are now available it should be possible to invite firm bids on the project. Assuming that the bids were invited by the International Economies and Technical Co-operation Division, Atomic Energy of Canada Limited would be prepared to accept the role of the consulting engineer.

In our conversation you raised the question as to whether we would be prepared to train Indian operators at Chalk River. There would be no difficulty in making such an arrangement. This is a point which should be stressed in any conversations which our High Commissioner's Office may have with the Indian Government.

I should expect that at some stage Dr. Bhabha, the Chairman of the Atomic Energy Commission of India, would be brought into the picture. Dr. Lewis has suggested that he might write an informal letter to Dr. Bhabha indicating our interest in providing a research reactor. I should like to have your comment on this suggestion.

Yours sincerely,
W.J. BENNETT