101
or the...
}
The Economic Commission vapressed the view that provision for deprecission of works financed from revenue ought not to be included in maintenance charges to be decited against water revenue (Report, paragraphs 31-32); part of their objection being that such depreciation provision as not actually paid into any Depreciation or Ronoral Fund. In principle I
think it is most desirable that there should be
provision against the contingency of renewal of ail works and equipment which may be expected to require
renewal within a reasonable period of time, as is
the common practice of other water undertakings and
similar enterprises. The proper accounting procedure
is to build up a Renewals fund to which such expenditure
can be charged. In the absence of such a Fund the
cost of renewal must be met by other means; 3.E.,
renewal of the cross narkour pipe line is now necessery and will have to be met from loan. There is, however, a factor in Hong Kong finance which forces a departure from orthodox principle - the
military contribution. If annual contributions were
made to a Renewals Fund and revenue raised from water
charges to cover such contributions, militery
contribution of 20% web have to be paid on such
revenue. The gross additional revenue to be collected
would therefore be 20;
than the Renewals contrib-
ution. On the other
ronovels are in due course
financed from loan the d. rgus on such loan will, if
present practice is mine ind be deductible from the revenue rssessable to Military contribution.
Unless and until there is a change in the militery
contribution system, tur foru, the balance of
ndvmungo