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b b b b b b L
PECORD OFFICE
Reference
C.O.882/12
· PUBLIC RECORD OFFICE, LONDON
| COLORRIGHT PHOTOGRAPH-NOT TO|
ALLY WITHOUT PERMISSION OF THE BF REPRODUCÈR PHOTOGRAPHIC-
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for the Colonies, and Messrs. Preece, Cardew, and Rider raising the question of the appointment of the latter as advisers to the Federated Malay States Government in the matter of the Perak River Hydro Electric Power Company, I have the honour to inform Your Lordship that this Government does not desire to retain Messrs. Preece, Cardew, and Rider to give technical advice on the progress of the Company, as arrangements are being made for the Director of the Electrical Department to obtain monthly reports direct from the local General Manager, and advise Government on any point which appears to require special consideration.
C. 92302/32 [No. 22].
SIR,
No. 19.
I have, &c.,
C. CLEMENTI,
High Commissioner.
THE PERAK RIVER HYDRO-ELECTRIC POWER COMPANY LIMITED
to
COLONIAL OFFICE.
[Answered by No. 32.]
66, Queen Street, London, E.C.4, 7th July, 1932.
I AM instructed by my Board to request you kindly to obtain the approval of the Government of the Federated Malay States, in accordance with the terms of the Concession, and in particular the provisions of Clause 12, to the acquisition by this Company of the electricity generating station of the Malayan Tin Dredging Company Limited, together with the transmission lines connecting their property with that of the Southern Malayan Tin and Dredging Company.
My Board have entered into a contract with the Malayan Tin Dredging Company Limited in terms of the Concession for the supply to them of the whole of their elec- tricity requirements and, for the acquisition of their generating plant and transmission lines. The whole matter has been the subject of long negotiations and has been very fully investigated.
My Board have instructed me to apply to His Majesty's Treasury for consent to borrow the necessary money against the deposit of additional. Prior Lien Debenture Stock as security. The proposals are fully set out in the letter which has to-day been written to His Majesty's Treasury, and perhaps the most convenient method of sub- mitting details of the matter to you is to enclose a copy of the letter to His Majesty's Treasury. This letter deals fully with the reasons for acquiring the generating station in addition to matters not immediately relevant to the application for the consent of the Government of the Federated Malay States in terms of the Concession.
I accordingly enclose copy of the letter above referred to for your information, and shall be glad to give you any further information should you require it to enable you to consider the proposals and to forward them with your recommendations to Malaya.
SIR,
Enclosure in No. 19.
I am, &c.,
D. C. BROOK,
Secretary.
66, Queen Street, London, E.C.4, 7th July, 1932.
I AM instructed by my Board to request authority to the issue of further Prior Lien Debenture Stock and for sanction for borrowing against the deposit with Bankers of the additional Stock so authorized for the purposes mentioned below.
Since the investigation into this Company's affairs in Malaya last year, negotia- tions have taken place with several large prospective consumers with a view to increasing the scope of the Company's business. Of these negotiations, those with the Malayan Tin Dredging Limited and Southern Malayan Tin Dredging Limited are the most important and indeed upon them the result of others largely depend.
These Companies are two of the most influential tin mining Companies within my Company's concession area in Perak, Federated Malay States, and are also two of the largest individual users of electrical energy for mining in the Federated Malay States.
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Additionally, some of their Directors are individually connected with other mining companies outside this group, which we are anxious to connect to our system.
Between them these Companies own a fleet of eight electrically-operated dredges consuming in normal times approximately 27 million units per annum, and, under the very stringent restriction regulations now in force, permitting production only of 264 per cent. now use some 7 or 8 million units per annum.
They are in a strong financial position and in the past my Company has been unsuccessful in its efforts to induce them to purchase their power requirements from our Power Station.
The principal difficulty has been the fact that these Tin Companies are the joint owners of an efficient steam Power Station having an installed capacity of 10,500 kilo- watts, originally constructed in 1925. We have been advised, after a full investigation, that a sum of £165,000 has been spent on the station, and also that this money has been well laid out and includes extensions during 1929 and 1930 representing one-half the installed capacity.
The two Companies have been highly successful in all their operations and have a considerable following in Malaya where they are looked on as most efficient and know- ledgeable in all questions of mining and mining policy.
It is common knowledge in Malaya that my Company's' overtures in the past for the sale of electricity to these two Companies have been rejected, and it is unquestion- ably the fact that this verdict on mining policy, as it is regarded, has prejudiced negotiations with other large prospective consumers who have no doubt in consequence refused to take power from our source of supply.
The recent negotiations with the Malayan Tin Dredging Limited and the Southern Malayan Tin Dredging Limited are now completed and a supply contract has been entered into, subject to the necessary consents, on a basis which should in normal times produce some £50,700 per annum. The revenue even under the present drastic, and what must be final, restriction should be not less than £17,000 per annum. This revenue, however, can only be secured by the purchase of the jointly owned power station, the price of which has been agreed at £115,000. This figure my Board, after consideration of the facts, are of opinion is a favourable and économical price to this Company.
On the other hand, if restriction is removed, these Companies will undoubtedly immediately work up to capacity, as they can produce and sell, working up to capacity, without loss with tin even at less than one-half the present price: and with their very ample financial, technical, and natural resources can undoubtedly carry on against any competition with restriction removed. Under such conditions the consumption would immediately increase and probably yield a revenue to this Company approaching the revenue which would be earned under normal conditions in the tin mining industry.
The acquisition of this Power Station will render unnecessary any extension of the Malim Nawar Steam Station, which would otherwise have had to be faced at such time as the Company forecasts supplying its full load, in order to meet the seasonal drought conditions in the Perak River. The necessity for such an extension has always been admitted and estimates have previously been considered, although actual con- struction was deferred indefinitely in view of the general economic conditions. The estimated cost of the proposed extension at Malim Nawar was much in excess of the expenditure now under discussion.
Apart from the direct financial result it is considered that the moral effect of this supply will be considerable, and that the ultimate effect will be that further consumers, who are at present generating their own power, will follow the example of these two Companies and arrange a bulk supply with my Company. The Power Station of the Malayan Tin Dredging is the only efficient and modern Power Station owned by Tin Mining Companies in our Concession area and is therefore the only one to be purchased. My Board, having arrived at the definite and unanimous conclusion that the con tracts they have provisionally entered into are a necessary preliminary to progress in the solution of the financial difficulties of the Company, now ask permission of the Lords Commissioners of His Majesty's Treasury to the borrowing against the deposit of additional Prior Lien Debentures of-
(a) the sum of £115,000 for the payment of the purchase price of the Malayan Tin Dredging and Southern Malayan Tin Dredging Generating Station, and (b) a sum not exceeding £30,000 to meet expenditure to make the necessary connexions and extensions in connexion with the supply to the two Tin Companies and other prospective consumers in their area.
Under the worst conditions, after allowing for the service of the Prior Lien Debentures representing the purchase price of the Power Station, a substantial surplus