53617
37.
2
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(b) The Colonial Government spends $60,000 on doubling a section
of the Customs Pass Road and waives its claim for
$125,866 cash payments in respect of the Kau Lung Tsai site as a sole contribution towards the cost of constructing the roads sketched on Enclosure (1), the maintenance of which (outside War Department lands) it will take over as from
the date of completion of each of them."
The $1,000,000 referred to in (a) represents rent at the rate of $125,000 per annum for eight years from 1st January, 1933. From the copy of correspondence with the War Office, enclosed with Mr. Ormsby-Gore's confidential despatch of 4th August, 1937, it will be seen that it was agreed that the War Department should be liable for the payment of rent for the
such other Sham Shui Po area at the rate of $125,000 a year or figure as might then be appropriate if the area remained in the occupation of the Military Authorities after 31st December, 1940.
3.
While this Government is prepared, in the circumstances,
to allow the agreed arrangements in respect of the Kau Lung
Tsai site to remain undisturbed until the termination of the war, it cannot agree to the suggested extension of the rent free
The retention of occupation of the Sham Shui Po Camp site. this area by the Military Authorities is seriously interfering
with town planning and town development, which is a vital
problem in a Colony where building land is scarce and where
development is already hindered by the unsolved problem of the
military lands. In this connection I would invite attention to
Section 3 of the Defence Contribution Ordinance, No.8 of 1939,
which reads as follows:
"The annual payments shall be deemed to be a fixed
contribution payable by the Colony in full return for
the annual cost of the Imperial garrison, including all
capital expenditure required for military lands and
buildings, and the cost of maintenance of all military
works and buildings, and the cost of lodgings in lieu of