PUBLIC RECORD OFFICE
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Reference :-
C.O.885
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16 PUBLIC RECORD OFFICE, LONDON
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equipment throughout should, in the opinion of the Engineer, be similar to the standard of the railway between Mafeking and Buluwayo.
By Clause 9 of the contract it was provided that the railway should be con- sidered as divided into sections of 20 miles or thereabouts, to be commenced and continued as therein mentioned.
By Clause 13 of the contract it was provided that the construction of the railway between Chiromo and Blantyre should be commenced and such railway completed and equipped in accordance with the contract so that the railway should be opened for public traffic on or before the expiration of five years from the date of the contract.
By Clause 14 it was provided that if, within the period of five years from the date of the completion of the railway in accordance with the contract between Chiromo and Blantyre, the construction of the railway between Blantyre and Lake Nyasa should, in the opinion of the Engineer, not have been substantially commenced, or if, in his opinion, the last-mentioned railway should not have been duly completed in accordance with the contract within five years from the expiration of such five years, the Government might determine the contract as regards so much of the rail- way between Blantyre and Lake Nyasa as should not have been completed as therein mentioned.
By Clause 28 of the contract it was provided that, when and so soon as any section of the railway should be completed and equipped in accordance with the contract, the Company should forthwith proceed to open and should continuously thereafter keep open and work the same for public and general traffic as therein mentioned.
By Clause 38 it was provided that the Government might, upon giving the Com- pany 12 months' previous notice in writing, expiring at any time after the expira- tion of 25 years from the date when the railway between Chiromo and Blantyre should have been opened for public use, of their intention in that behalf, purchase the railway as therein mentioned, and that the Government should on taking posses- sion pay to the Company inter alia a sum equal to £4,750 for each mile of the railway between Chiromo and Blantyre and also for each mile of railway between Blantyre and Lake Nyasa which should have been duly completed in accordance with the
contract.
By Clause 42 it was provided that, in consideration of the obligations imposed on the Company by the contract and subject to the provisions of the contract, the Government should grant lands in the Protectorate of Nyasaland in fee simple to the Company by way of subsidy as follows:-
(a) The Company should be entitled to grants of 3,200 acres of the said lands, thereinafter called the subsidy lands, in respect of each mile of railway duly completed in accordance with the contract between Chiromo and Blantyre, and also to grants of so many acres of the subsidy lands as might be fixed by agreement between the Government and the Company in respect of each mile of the railway between Blantyre and Lake Nyasa which should have been duly completed in accordance with the
contract.
(d) One half of the subsidy lands to be granted in respect of each section of the railway should be granted to the Company as and when the Engineer should have certified that such section had been completed, equipped, and opened for traffic in accordance with the contract, and the other half of such lands should be granted to the Company when the railway between Chiromo and Blantyre should have been certified by the Engineer to have been so completed, equipped, and opened. (e) If the railway between Chiromo and Blantyre should not be so completed, equipped, and opened within five years from the date of the contract the Company should cease to be entitled to a grant of any subsidy lands not then actually granted unless the delay in such completion, equipment, and opening should, in the opinion of the Engineer, have been due to some cause beyond the control of the Company, or to some act on the part of the Government.
By Clause 53 of the contract it was provided that in case, and so often as, any dispute, difference, or question should arise between the parties to the contract, or any Government, person or corporation claiming through or under them respectively, or between any of such Governments, persons or corporations, or between the
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Engineer on the one hand, and the Government or the Company on the other, con- cerning or relating to the railway or any part thereof respectively, or the construc- tion, meaning, or effect of the contract, or any clause or thing therein contained, or the rights or liabilities of any party thereto, or of any such Government, person or corporation as aforesaid under the contract, or any opinion, approval, decision, or certificate given by the Engineer, then the subject of every such dispute, difference, or question should be referred to arbitration as therein mentioned.
By Clause 7 of the contract it was provided that subject to the provisions of Clause 53 every certificate in writing of the Engineer given under his hand should be binding on the Government and the Company in respect of all matters thereby in effect referred to the decision of the Engineer.
contract.
3. It appears to Mr. Harcourt that the question (a) above referred to depends entirely on the construction of the above contract, the 1908 contract, under which the line was extended southwards from Chiromo to Port Herald, not affecting the principal contract in this respect. I am, however, to bring to your notice certain facts which are of importance as affecting the general situation of the parties to the principal contract. The Company is controlled by the British Central Africa Company, Limited, to which on the 22nd of April, 1912, it conveyed all its right, title, and interest in the subsidy lands under the principal contract and the 1908 On March 12th, 1913, an agreement was entered into between the Crown Agents, acting for the Government of Nyasaland, and the British Central Africa Company, Limited, whereby the Government (so far as regarded such part of the railway and works thereinafter mentioned as would be within the Protectorate of Nyasaland) granted to the British Central Africa Company the right to construct a line of railway from the Port Herald terminus of the Port Herald-Blantyre line to a point on the north bank of the Zambesi River intended to be opposite to the terminus, on the south bank of the river, of a proposed railway to be constructed within the territory of the Mozambique Company to Beira, and, as part of the consideration for the construction of this line, agreed to redeem the subsidy lands for a cash payment of £180,800, a price much in excess of the present value of the lands.
This arrangement, it appears to Mr. Harcourt, has entirely altered the situation as regards the two above-mentioned Companies. At present the line terminates at Port Herald, on a river which is either unnavigable, or navigable with great diffi- culty, during a large portion of the year. The Government, by redeeming the subsidy lands for this large cash payment, are procuring the extension of this line to the Zambesi, thereby assuring connection with ocean transport. The result is expected to be a very large increase in traffic and in the revenues of the Railway Company. Moreover, an extension northwards to Lake Nyasa will mean that practically the whole traffic of that extension will be carried over the line from Blantyre to the Zambesi, and thereby further increase the Company's earnings. In these circum- stances it would appear that the construction of the extension to Lake Nyasa would be a profitable undertaking for the Company even in the absence of a subsidy, and that even if you are of opinion that the Government are bound by the contract of 1902 to offer some subsidy-the Government could successfully resist any claim by the Company to a subsidy comparable to that granted in 1902 (viz., 3,200 acres per mile of railway). In this connexion, I am to observe that for administrative reasons it is desirable that no grant of Crown lands should be given to any Company which is entrusted with the construction of the Lake Nyasa extension, or that, if any such grant has to be given, it should be confined within the narrowest limits.
4. In these circumstances Mr. Harcourt desires to be advised whether the Government is bound, and if so to what extent, by the terms of the principal agree- ment and the 1908 agreement, to allow the Company to undertake the construction of the Blantyre-Lake Nyasa extension, or whether the terms of the contract in this respect are too indefinite to be enforceable against the Government by arbitration or otherwise.
5. Mr. Harcourt also desires to be advised as to the time within which the Company must substantially commence the construction of the Lake Nyasa extension in order to comply with the provisions of the principal contract and the 1908 con- tract, and I am to state that he desires to be advised as to the construction of the contracts in regard to this point, whatever your opinion may be upon the general questions of the Company's right to carry out the extension.
With reference to this question, I am to call your attention especially to Clause 14 of the principal contract, which gives the Government power to determine
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