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7:

As regards the conditions of lease, there

are three possible courses.

(a) The Government could construct the wharves at its

own expenses and lease them to applicants.

(b) The Government could construct the wharves at the

expenses of the applicant, who would take them over

on completion.

(c) The applicant could construct the wharves under the

supervision of the Government.

I am not in favour of the proposal (a). Persons having vested interests in private wharf and godown companies are jealously watching the Government, prepared to raise the loudest possible outcry at any sign which may be interpreted as the Government going into business on its

own account.

Of proposals (b) and (c) I prefer the second alternative. The Government has already quite as much work in hand and in prospect as it can manage, and the supervision

of the Port Engineer would ensure the proper construction of

the wharves by the private parties concerned. Specifications

and the appointment of contractors would be subject to the

Port Engineer's approval.

8.

I shall be glad if the Hung Hom Bay Scheme,

as designed by Mr. Duncan, may be referred to Messrs. Coode,

Fitzmaurice, Wilson, and Mitchell for their advice, both on

the Scheme generally, and more particularly as to the feasibility of making an early commencement with the first two portions to which I have referred. They should be

informed that the main reason for the divergence from the

design which they put forward is to be found in the urgent demand of shipping companies for the provision of shelter

for large vessels from typhoons. I attach a memorandum by

the Port Engineer in this connection.

9.

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