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PECORD OFFICE

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PUBLIC

RECORD OFFICE, LONDON

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electricity issues as were attempted, backed with the weight of Government auspices, proved a failure, barely 10 per cent. being taken up by the public. The Federated Malay States Government came to our assistance on terms which could not have been obtained elsewhere, to the permanent benefit both of the undertaking and the users of current.

Not only have we found it unnecessary, in spite of the extra cost of the scheme, to raise the charges of current, but we have been able, in some degree, to lower them at a time when the Tin Industry is very depressed, temporarily, as we all hope. It is true that in so helping financially, the Federated Malay States Government has followed the now well-established precedents set up by the Home Government

But, Sir, your Government was not induced to help by precedents, however sound, but because you were desirous of seeing carried through to completion, on reasonable financial terms, a scheme which you believe will be of real and lasting benefit to the Tin Industry and towns located along the famous Kinto Valley. You depend for a large part of revenues upon the prosperity of the Tin Industry.

your

Our prosperity is bound up with that of the Tin Industry. That industry can lower its productive cost by using the public service now at its disposal. Our hope and request is that they will do so fully. If they do, then, Sir, I am confident that the financial investment which the Federated Malay States Government has made in this Hydro-Electric Undertaking will ultimately prove to have been opportune, sound and profitable.

It is not only. Sir, as High Commissioner, but as representing the large Govern- ment interest in this Undertaking that you are doubly welcome to-day, and while I regret as he does himself—that Lord Elibank could not be here to thank you more adequately than I can, I do thank you most warmly and sincerely for coming here, and for starting us along a road which, though beginning in a valley of depression, caused by the tin slump, will climb in time to a sunlit summit of prosperity.

(The speech was punctuated with applause.)

Enclosure 6 in No. 1.

SPEECH DELIVERED BY HIS EXCELLENCY THE HIGH COMMISSIONER AT THE OPENING CEREMONY OF THE CHENDERoh Dam and Power Station on 28th June, 1930.

SIR ARNOLD GRIDLEY, YOUR HIGHNESSES, Ladies and GENTLEMEN,

We have witnessed to-day the completion of one stage in the most important engineering work hitherto undertaken in the State of Perak and the inauguration of its second stage. The first stage now successfully consummated is that of construction. You see before you what has been done. The Perak River has been, harnessed: a dam has been thrown right across it, forming a large artificial lake extending for miles up stream, and a very efficient hydro-electric power plant has been installed. The work is impressive in its size and strength. It should stand the severest tests both of time and flood. It is a triumph of engineering skill, and it reflects very great credit on all who were engaged in its construction. High praise is also due to the anti- malarial prophylactic work, done by Dr. Scott and his staff, which enabled the labour of construction to proceed without undue loss of life in an area where a malaria rate running as high as 20 per cent. and more per mensem had been known to occur. There was resident here during the construction period a population of over 4,000 souls, including more than a hundred Europeans; but the annual death-rate for the whole period of construction was only 4.96 per mille. These figures show that construction was at no time hindered by sickness among the labour force, and that malaria was definitely kept at bay. This anti-malarial work by Dr. Scott at Chenderoh in Perak, and by Dr. Hunter at the Gunong Pulai Reservoir in Johore, has set a standard and achieved results which are of value not only to Malaya, but throughout the world.

The doctors and engineers have done their duty faithfully and well, and it now devolves on the business men to see that this fine power plant shall bring the greatest possible benefits to the mining industry of Perak as well as to shareholders in the Company. The provision of cheap power is a valuable asset to any country; but in a comparatively young and developing State, like Perak, its potential value is incalcul- able. Electrical development throughout the Federated Malay States has, in recent years, been an outstanding feature of Government policy; and, while we may con- gratulate ourselves on what has already been accomplished by the Government Elec- trical Department, I hope that, as the finances of the country permit, further extensions will be made both by official and unofficial enterprise, not only in the State of Perak, but in the States of Selangor, Negri Sembilan and Pahang as well.

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The original scheme of the Perak River Hydro-Electrical Power Company, as detailed in the prospectus issued in July, 1926, was to provide for an annual output of 100 million units from three sets of plant, each of 9,000 kilowatts capacity (one being a spare), installed at the Chenderoh Hydro-Electric Station, with a standby steam set of 5,000 kilowatts capacity at Malim Nawar, together with the necessary transmission lines, sub-stations, &c. The capital cost of this scheme was put at £2,320,000, and it was estimated that the work would be completed in three years from the end of 1926. During 1927, however, it was deemed advisable to extend the steam station at Malim Nawar from a capacity of 5,000 to 18,000 kilowatts at an estimated increase in cost of some £260,000; and, with this increase in capacity, the total annual output of the Company was estimated at 160 million units as compared with the 100 million units of the original scheme. Various factors, which it is not necessary to touch upon to-day, contributed both to delay completion and to increase very largely the cost of construction, so that the capital of the Company now stands at £4,450,000. Thus, apart from sinking fund contributions, most of which only commence to operate from 1934, it is clear that the debenture and loan interest on the Company's capital, together with dividends on Ordinary and Preference Shares, will form a very heavy charge against its annual receipts; and, although the opening of the Chenderoh Station will enable the Company largely to reduce operating costs, it must be frankly recognized that, owing to the low prevailing price of tin, a longer period than was at first anticipated must elapse before consumption will so increase as to enable the Company to operate at its full capacity. Consequently, the financial position of the Company for the next two or three years will be beset with anxiety, Such anxieties, however, are not peculiar to the Perak River Hydro-Electric Power Company, since in the early days of most large electrical undertakings it is a common experience for consumption to lag behind the capacity to supply, and, as large con- sumers of power produced by steam or oil engines are usually somewhat loth to adopt electrical power instead, some time must inevitably elapse before undertakings of this kind can get into their full stride. This financial difficulty has, I am sure, been fully recognized by the Company, and it calls for the utmost efforts of the Company not only in effecting all possible economy and stimulating consumption, but also in devising forthwith ways and means to tide over the shortage of revenue during this initial period. The Government of the Federated Malay States is deeply concerned in the success of the Perak River Hydro-Electric Power Company, for it owns no less than £1,425,000, or approximately one-third, of the total capital of the Company; and, apart from divi- dends on £75,000 worth of Ordinary Shares, which the Government holds in the Com- pany, we expect to receive £40,000 a year from Preference Shares in the Company and £42.500 a year from our loan to the Company. The Government is, therefore, a large partner in this enterprise, and we are very anxious that it should succeed.

It

In conclusion permit me to thank you, Sir Arnold, for your kindly welcome has been a great pleasure to me to come here to-day, as representative of the Govern- ment of the Federated Malay States, and to open this hydro-electric station. I wish the venture a safe start and a prosperous future, and I shall watch its progress with the greatest interest.

Enclosure 7 in No. 1.

THE PERAK RIVER HYDRO-ELECTRIC POWER COMPANY LIMITED.

The Chief Secretary to Government,

Federated Malay States, Kuala Lumpur.

SIR,

Ipoh, Perak, Federated Malay States,

29th June, 1930.

I now have the honour to enclose herewith in the form of draft Heads of Agree- ment (3 copies) the proposals outlined at the conclusion of our Conference at "Carcosa

on the 25th instant. These have been framed as briefly as possible, and will, I think, be found clear.

These proposals have the advantage that :-

(1) They will enable the Company to obtain such further cash as may be

needed.

(2) The Government need not consider the possibility of having to make a further cash investment at a time when their revenues from tin and rubber are diminished.

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