90
the overdraft has reached some three or four million
dollars, would be cheaper than to finance the works
long
immediately from permanent money. But it often happens
that short borrowing is at any particular moment cheaper
than long. This, however, does not make it sound, more
prudent, to finance permanent works from short money, so
incurring an undefined liability which may turn out to
be particularly expensive in the end.
Apart from this, the particular method proposed
to be adopted in this case looks unnecessarily complicated.
The Government will apparently borrow from the Bank, and
also deposit Sinking Fund with the Bank, paying interest
the balance between overdraft and deposit. Later they
will fund the overdraft, and presumably repay part of
the funded loan from the Sinking Fund deposit. Would it
not be simpler and more convenient to charge finally
against revenue in any year, the cost of capital works
up to the amount of Sinking Fund which it is proposed to
deposit?
Yours sincerely,
It. Woods,