7
(3)
reduced at the moment, a part at least of this project should I suggest be deferred until the inflationary situation Hong Kong is less bad.
Fertiliser factory. This factory should,
I think, be financed by loan and run as a commercial profit making enterprise.
(4) Extension of Irrigation. Irrigation engineers
are extremely difficult to obtain and unless more funds ca. be put at the disposal of
an Engineer in Hong Kong than is proposed, I doubt whether the appointment would be of sufficient value to justify it.
(5) Village Depots. It is difficult to appreciate exactly what is proposed in the absence of more information about the Fisheries Syndicate. The scheme does, however, look like a subsidy of £27,000 to establish co-operative societies, and I suggest that the proper cost attributable to facilities placed at the disposal of such societies should be financed by loan and only that part devoted to the demonstration of improved agricultural methods financed by free grant.
(6)
Market Transport. I agree with Mr. Clay that if this is to be financed from public funds it should be on a profit making basis.
(7) Agricultural Stations. Further consideration of
this should await the appointment of Senior Agricultural staff.
(11) Mechanisation of Fishing Fleet. I cannot
understand the financial implications of the proposal that a revolving capital grant should be made to the Fisheries Department in view of the statement that the Funks in which the engines will be fitted will be the property of the Fisheries Co-operative. It appears that this service should be financed by loan to the Fisheries Co-operative.
H.Alawi's
31/12/47
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I mit nearly ? enough
The territorial allocation to Hong Kong is £1,000,000. As Mr. Harding indicates in his minute, it is possible that the Treasury may wish to transfer items at present in the reconstruction programme to C.D. & W. These may amount to two million Hong Kong dollars or, approximately, £235,000. There is also bound to be expenditure for C.D. & W. monies on projects in the colony and it would be as well to allow another £250,000 for these. Taking the above considerations into account it would be reasonable to plan for grants from C. D. & W. of up to £500,000 in the New Territories. It is satisfactory to find that fishing and agriculture are being given a high priority in the post-war plans and that the proposals now submitted relate to developments for these industries. I, however, agree with Mr. Harding that certain of the projects should be considered as commercial and that they should, when possible, be financed by loan money. It would, however, not be wise to try to drive too hard a bargain where the projects are experimental in character and in such instances I am suggesting in the notes below that the finance required should be made available on the basis of 50% grant and 50% loan. This policy is suggested in order to get the schemes started and to give them a chance of proving during the first stages whether they can later on be continued on a purely commercial basis. It is a pity that Dr.Herklots will not be in Hong Kong to see these schemes started and it can only be hoped that a suitable successor to him will be found.
My comments on the various recommendations are given below as well as my proposals in connection with them:-
Recommendation (i). Feeder roads are clearly an essen- tial to development but the estimates of costs are high.
Allow £50,000 to be spread over the next two years and then review the position.
Recommendation (ii). Piers. Undoubtedly desirable but costs again appear to be high,viz, £8,000 per pier. Allow £50,000 to be spread over the next two years and then review the position.
Recommendation (iii). The fertiliser factory should be run, as far as possible, on commercial lines. The project is, however, somewhat experimental and in these circumstances I would propose that it be financed on the basis of 50% grant and 50% loan.
Recommendation (iv). This is certainly a desirable project but the estimates are far too low. An irriga- tion engineer, if he can be obtained at the age level contemplated will cost with passages, superannuation, etc. not less than £1,200-£1,500 per annum. His sub- ordinate staff will involve an expenditure of an equal amount and for expenditure on works a sum equal to at least double the total cost of salaries should be allowed if technical skill is not to be wasted. For a five-year scheme an estimate of £45,000 should be the minimum budgeted for.
Recommendation (v) As this is purely experimental I think it should be agreed that the first three depots should be financed by grant. If these are successful any subsequent developments should be financed only by loans. It might have been desirable that these depots should have followed the agricultural station but such delay would not be desirable and the risk must, I feel, be taken.
Recommendation (vi). The vegetable marketing scheme should be run on commercial lines and the finance required for capital equipment should be by loan.
Receommendation)