3
PUBLIC RECORD OFFICE
23
Reference :-
C.O. 882
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
No. 1.
The RIGHT HON. SIR W. H. GREGORY, K.C.M.G., to the HoN. R. H. MEADE, C.B.
3, St. George's Place, Hyde Park Corner, S. W.,
July 1, 1886.
MY DEAR MEADE,
I SEND you a most important letter just received which well deserves to be read, marked, learned, and inwardly digested. It is written by Mr. Atkinson, a gentleman of great experience, a visiting agent of coffee estates. I think he has visited Darjeeling.
I also send you an extract from MacBride's letter, which pray consider so far as his name is concerned as confidential. The Governor would probably resent his even writing
to me.
I am perfectly certain that the true policy would be to break gauge at Kandy by putting on a third rail there, both on the extension to Nanu Oya and on the Matale line. The enormous expense of the maintenance of these lines would be diminished immensely by light rolling stock, which would quite do the work.
There is no doubt but that the moment you get your line extended to Haputale you will have to extend it to Badulla, and just the same arguments which are used now will be used then, that it does not pay because it does not go far enough to catch all the traffic, but that it will pay if extended.
:
I do not see how the Colonial Office can face the responsibility of adding 500,000l., and if you go to Badulla of 100,000, to the debt of the Colony. The unofficial and real opinion of every educated native is opposed, not to railway extension, but to the expensive broad gauge extension.
You will shortly have fresh statistics to prove the extension will pay. Mark my words and MacBride's letter-they will be as fallacious as former ones, for they depend on a continuance of coffee which is every day going out everywhere.
I need hardly say that all I want is to have an inquiry as to the adaptability and sufficiency of the Darjeeling system to Ceylon, but I lay stress that the inquiry should be conducted not by planters and amateurs but by competent persons.
Yours sincerely, (Signed)
P.S.-I will send to-morrow an account of our deputation.
SIB,
Enclosure 1 in No. 1.
W. H. GREGORY.
Kandy, Ceylon, June 7, 1886. MAY I ask you to be good enough to consider the following statements respecting a narrow gauge railway for Ouvah? I trust that the warm interest you take in Ceylon affairs, and particularly in this question, will afford me a sufficient excuse for addressing you, although much of what I have to say may not be new to you.
My object is to show, 1st, the very large per-centage of profit that could be earned on the capital cost of a narrow gauge railway, and to compare it in this respect with a broad line.
2nd. That as this is earned almost entirely on the 129 miles between Nanoo Oya and Colombo, the question of working expenses on the Ouvah section is of very little
consequence.
3rd. That a narrow gauge line offers the only chance of getting a railway from Haputella to Badulla.
I append a memorandum which will explain, and, I hope, make good, the figures used. They may be verified by references to the sessional papers containing the Railway Commissioners' reports, and to the Ceylon Directory, except those quoted from papers that have been supplied to myself by Mr. Prestage of the Darjeeling Railway Company.
To begin with, an estimate of the traffic and returns is required, say,---
Down traffic, 5,062 tons at Rs. 5 = Rs. 25,310
Up
"
15,188
"
7/50
113,910
Coaching and miscellaneous, Rs. 3,000 per mile -
139,220 75,000
214,220
Less working expenses, 70 per cent.
149,954
Rs. 64,266
On a narrow gauge line costing Rs. 70,000 per mile for 25 miles this is equal to a profit of 3.67 per cent.
Rs. 1,750,000,
On a broad line costing Rs. 220,000 per mile = Rs. 5,500,000, the return would be only 1.16 per cent.
It is evident from these figures that a broad gauge railway in Ouvah, considered by itself, could not pay the interest, much less provide for a sinking fund, of its cost. could it be extended to Badulla.
Nor
It is also evident that the profits of the extension are not to be made in Ouvab. ́ They are to be made by the Ouvah traffic on the 129 miles between Nanoo Oya and Colombo, and may be estimated as follows:-
Down traffic on 129 miles, 5,062 tons at Rs. 19 Up
15,188
27/50
59
Coaching and miscellaneous traffic, say 1/10th
Less working expenses, 40 per cent.
Add profit on Ouvah section brought down
·
Rs. 96,178 417,670
513,848
51,384
565,232 226,092
339,140
64,266
Rs. 403,406
This is equal to a profit of 231 per cent. on the cost of a narrow gauge line, or of 7.3 per cent. on the cost of broad line.
Looked at in this light, the advantages of comparison are all on the side of the narrow gauge.
As regards the second point in my letter, the foregoing estimate shows that the working expenses of the Ouvah section is a matter of very little importance. Even if they amounted to 100 per cent. of the receipts, there would still be a profit of Rs. 339,140 earned by the diverted traffic. This would remain as a fixed quantity, and would give a dividend of 19.3 per cent. on the cost of the narrow gauge extension.
And as regards the third point, if the broad gauge line were extended to Haputella, 25 miles, at a cost of Rs. 5,500,000, the new traffic of Ouvash would all be caught there, and nothing could be gained by spending another sum of Rs. 5,000,000 to carry the line into Badulla. This extension would, therefore, have to be proposed on its own merits as a local railway, and I cannot see any possibility of the money being obtained for it.
In conclusion, I think it is plain that a cheap narrow gauge railway would pay three times as much interest as a broad line; it could carry the traffic, and much more than could be got for it; it could be made quickly and could be extended to Badulla. Its rates of freight might be lowered beyond all competition, and it would bear a great reduction of the quantity of its traffic, without ceasing to be a very profitable investment. If the Government have any apprehensions of the future of coffee, and if they have any lingering doubts of the success of tea in Ouvah, it will surely be wise and prudent on their part to prefer a railway that will pay for itself in four years.
It would probably be regarded with favour by the minority of native malcontents, and its acceptance would, therefore, terminate an unfortunate difference. The opinions of most planters, are, I believe, already in favour of it.
The Right Hon. Sir W. H. Gregory,
London.
I am, &c. (Signed) H. ATKINSON.
P.S.-I hope it may be possible to overcome the resistance of Mr. Hutton Gregory, and to bring the Colonial Office to a favourable decision. Failing this, I think the Government should stand aside and give a concession to a private company,
I shall be obliged if you will favour me with a line by way of acknowledgment of this letter, an I shall be anxious to know that it has reached you.
a 2
H. A.