11
46. The accounts show that a deficit of $1,722,523.93 brought forward from previous financial years has been cleared. This is the first year during the existence of the Railway in which out- standing deficits have been cleared.
47. A sum of $19,400,000 was allocated to the Railway from the Hong Kong Government's Rehabilitation Loan. Expenditure against this Loan commenced in 1947. The period of the Loan is 1973-1978, with a life of about 26 years. Repayment of the Loan over a period of 25 years has now commenced, and the first instalment, a sum of $776,000 has been included in this year's accounts. The Loan Expenditure at the end of the year is $3,424,486.07, but there are outstanding orders with the Crown Agents to the value of $8,768,738.
48. As shown in the balance sheet the surplus is $814,618.40; this is satisfactory when it is taken into consideration that a deficit of $1,722,523.93 from previous years has been cleared and the first annual loan repayment of $776,000 has been included in the
accounts.
MECHANICAL WORKSHOPS.
49. Locomotives. Three tank engines which were beyond repair have been sold. Two tank engines Nos. 12 and 13 were given major repairs. Ten 2-8-0 Austerity engines have been given medium repairs including the fitting of limpet mattresses to save heat loss, so that all the 12 Austerity engines are now provided with limpet mattresses.
50. Two 4-6-2 Skoda engines returned from India by the British Military Authorities who requisitioned them in 1941, were re-erected under our supervision for return to the Canton-Hankow Railway.
51. Six sets of Hulson rocking grates were received from the United Kingdom, and three sets have been installed in Austerity engines Nos. 27, 29 and 32 to replace the fixed grates which are not suitable for long distance runs with the kind of coal available.
52. The 65 ton locomotive crane was given a light overhaul except for the boiler which has been given a general heavy over- haul. A complete set of cables has also been ordered to replace the original supplied with the crane in 1924.
53. The Austerity locomotives are proving expensive to maintain. Built for the special purpose of restoring the shattered railways of Europe, they were intended as stop-gaps with apparently a short expectation of life. Many spare parts supplied with these locomotives have become useless owing to wear that has taken place to the locomotives. A particularly costly item is the horn-block lining. This was originally provided with babbit metal and no means of taking up slack. The wear is rapid and all wheels have to be dropped for re-lining. A re-designed guide of adjustable type is undergoing tests.