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on all bills till the work is finished. I do not recollect what proportion this bore to the contract price, (I should be glad to know) but it seemed inadequate. This system appears somewhat irregular and unsatisfactory. "Financial Instructions" do not perhaps entirely apply to the Departmental System of Railway Construction, but Rule 101 is opposed to such procedure. Hon. Colonial Secretary stated that Sir H. Nathan had laid it down that the Chief Resident Engineer should not enter into any contract over $500 without the Governor's consent. I observed that this limit seemed to me very low, and that what I desired was not so much a fixed money limit at all as that Government should have more knowledge of what contracts were offering in order that the services of the Hon. Director of Public Works might be available to assist the Chief Resident Engineer. It goes without saying that owing to the fact of his long residence here, the innumerable contracts which he has made, and his personal knowledge of all local contractors European and Chinese - his assistance in such a matter must be of great value and his opinion on the tenders would carry great weight with the Government on whose behalf and at whose cost the Railway is being constructed. It is not a question of interfering in any way with the supervision of the Chief Resident Engineer in Railway matters or of lessening his responsibility, but merely of assisting him in the placing of contracts (which he desires to place) to the best advantage by enlisting the co-operation of those who have greater local experience. If the Chief Resident Engineer desires to let a contract therefore he should prepare the necessary specifications &c., and submit them to the Government together with any offers for the work which he has obtained. The Government will then satisfy itself that the contract is the best obtainable (probably by putting it up to tender) and that the security is sufficient. I think this principle might be carried even further, and that the Chief Resident Engineer should discuss with the Director of Public Works or at a meeting such as this the various works in hand
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