:
(3)
339
8.
Under the Tramway Ordinance, a Royalty is now paid to
the Government of 5% of the working profit but for the first 10
years after the opening of the tramway this was not the case. The
Company is however prepared to regard the Kowloon tramways as an
extension of its present lines and from the outset to include
the Revenue therefrom in the calculation of Royalty.
9.
From observations made in Kowloon I would observe that
the potential traffic there for a long time ahead does not appear
to be large, and it would only be by the most economical working
and by taking advantage of its present plant and resources that
the Company could make a tramway system there remunerative. It
is indubitable that the tramway could not be worked as economically
by the Government as by this Company. In the first place the
Company has the advantage of having at its disposal a staff of
Europeans with long experience of tramway work and would save in
management expenses, It would probably only be found necessary
to employ one additional European, whereas under the Government
a complete new staff would be required. Further, the Government
would require complete workshops for the repairs to cars, whereas,
if the Company undertakes the work, the larger repairs would be
done at the existing workshops of the Company in Hongkong, leaving
only minor adjustments to be attended to in Kowloon. This would
mean additional saving in working expenses.
10.
A further important advantage which would accrue to the
public from the tramway being in the hands of this Company is that
the experienced staff referred to have not only long experience
of tramway work, but also of local traffic requirements and of
obtaining the best results from the skilled native Chinese labour
which has to be employed.
11.
If the Government construct and work the tramway, they
will almost inevitably be faced with a loss on working for a
number of years. If the concession is granted to the Company, the
Government are immediately in receipt of Royalty, the roads on
which the track is laid, (and for 18 inches on either side) are