120
HONG KONG LEGISLATIVE COUNCIL.
In the Budget Debate which took place on 7th October, 1936, I referred to the rumour I had heard as to the filtering capacity on the Island, and as to the carrying capacity of the aqueduct along the King's Jubilee tunnel, but I did not know at the time that there could be any question of water shortage.
The reply of the Hon. the Colonial Secretary to these two points is as follows:-
"The Director of Public Works
Works has recommended the installation of rapid gravity filters at Bowen Road in place of the existing sand filters but this project has had to be postponed for the present owing to lack of funds. I am advised that the aqueduct at Shing Mung has a capacity of twenty million gallons per day and has been designed to deliver the ultimate maximum drawoff from Shing Mun. The size of the tunnel was governed by considerations such as economy of construction."
It will be seen that there was not a single word to indicate that after the completion of Shing Mun the supply to this Island would immediately become inadequate.
During last year's Budget Debate I set out figures to show that the amount properly attributable for interest on the capital expended on the water works, the amount payable for the annual reduction of the capital loans, and for the cost of maintenance, amounted to $1,700,000, as against the estimated revenue attributable to water supplies, amounting to $2,433,824, resulting in an overcharge of some $700,000. The Hon. the Colonial Secretary, in reply to me, referred to figures which had not been included in my calculations, such as interest and sinking fund on a certain capital outlay, etc., etc., etc., and stated that if all the excluded items had been taken into account, the estimated surplus would have been turned into a deficit. But as far as I know, detailed figures showing capital expenditure, depreciation, etc., on the one hand, and revenue on the other, from the beginning to date, have never been laid before this Council. Indeed, I doubt whether they are available. The truth of the matter is that the Water Supply Department has never been run on a strictly business basis, with proper balance sheets, and profit and loss accounts. As was shown in paragraph 31 of the Economic Commission's Report, $10,000,000, representing capital outlay on waterworks prior to 1st January, 1927, had been paid for out of past revenues, and the annual depreciation of 12% was never earmarked or credited to a reserve fund, but was charged annually on the full capital, and not upon the depreciated capital value, and other items of expenditure were properly criticisable from the point of view of accounting.
The total estimated revenue for water excess charges and meter rents for 1938 is estimated at $1,900,000. I venture to think that this
184