CO885-(11-12) — Page 124

:

ORITE PECORD OFFICE

Arference-

dimmi C.O.882/12

PUBLIC RECORD OFFICE, LONDON

ALLY WITHQU1 · PËRMISSION OF THE BE REPRODUCED `PHOLOGRAPHIC-

(COPYRIGHT PHOTOGRAPH--NOT 10

52

remains which strengthens the position of the 5 per cent. Guaranteed Debenture Stock, which in turn strengthens that of the £850,000 loan from the Federated Malay States Government.

I am instructed to say that the financial scheme of the Board (including the expenditure for which permission is now sought) does not contemplate under even the present conditions any necessity for increasing the present limits of the authorized Prior Lien Debenture Stock, in order to provide for all the Company's obligations at this date including the obligation herein proposed and provision for due payment of the Sinking Fund on the 5 per cent. Guaranteed Debenture Stock. My Board would be pleased to give you any further information you may desire, but I hope the particulars submitted are quite clear and sufficient to enable you to assent to the proposals.

I am, &c.,

The Secretary,

Treasury,

Whitehall, S.W.1.

C. 92302/32 (No. 25].

(F. 8720.)

SIR,

No. 20.

TREASURY to COLONIAL OFFICE.

Secretary.

Treasury Chambers, Stlı July, 1932.

I AM directed by the Lords Commissioners of His Majesty's Treasury to request you to inform the Secretary of State for the Colonies that They have had before Them a letter dated 7th instant,* received from the Perak River Hydro-Electric Power Com- pany Limited, applying for authority to borrow against the deposit of additional Prior Lien Debentures of the Company:

(a) the sum of £115,000 for the payment of the purchase price of the Malayan

Tin Dredging and Southern Malayan Tin Dredging 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 above Com- panies and to other prospective consumers in the area.

Their Lordships understand that a copy of this letter has been addressed to you under cover of a separate lettert of the same date from the Company.

+

After consultation with the Trade Facilities Act Advisory Committee Their Lord- ships consider that these proposals are framed in the best interests of the Company and They would be disposed to give Their sanction in terms of the Scheme of Arrange ment subject to the consent of Sir Philip Cunliffe-Lister on behalf of the Government of the Federated Malay States.

Their Lordships would be glad to learn as soon as possible whether Sir Philip Cunliffe-Lister concurs in the Company's proposals.

I am, &c.,

53

Reference to the Company's letter to the Treasury of 7th July,* shows that the revenue under the present drastic restriction should be not less than £17,000 per annum. Taking into account the two-part tariff mentioned above, this revenue repre- sents the sale of 7,000,000 units per annum at 2.08 cents a unit which compares favourably with the Company's tariff for consumers of a like number of units.

(2nd) The reference in the letter quoted is not to any supply undertaking within the concession area, but to the various electricity supply concerns in the Peninsula, in connexion with which suitable amalgamation or purchase arrangements might properly be made, with a view, inter alia, of improving and safeguarding the Federated Malay States Government's interests in the Company.

As regards the general policy of buying up other competing units :—— The Company confirms that there is no other units which it wishes to purchase. On the other hand, if advantageous supply agreements could be obtained on terms which it would be impossible for the Company to refuse, the matter would be communicated to the Government under Clause 12 of the Concession.

(3rd) Receipts from sale of power to Malayan tin will more than cover interest in Prior Lien Debentures required for the purchase, as will be seen from page 4 of the Company's letter to the Treasury of 7th July, which apparently covers the point raised. The statement in the last paragraph of the telegram regarding Malim Nawar, Chenderoh, and restriction is correct, but even so it is obviously of advantage to the Company to conclude the agreement as its revenue should immediately be enhanced by a minimum of £17,000 per annum at an additional cost in Prior Lien interest of some £6,000 per annum, and this revenue cannot fail to increase rapidly with any relaxation in the Restriction Regulations.

While it is admitted that the Company has ample generating power at its disposal for the moment, the primary importance of the acquisition of the new station is the valuable assistance which the additional revenue, so badly needed, will give. The revenue should more than pay for the station within a few years, and it is reasonable to assume that when times are normal the extra supply will be most useful. In short, the Company is not so much acquiring extra generating capacity as purchasing a valuable source of revenue for a considerable period, and the matter must primarily be con- sidered from this view-point.

23rd September, 1932.

C. 92302/32 [No. 45].

57

C. 92302/32 [No. 42].

No. 21.

E. J. STROHMENGER.

MEMORANDUM BY MR. C. W. H. COCHRANE (MALAYAN INFORMATION AGENCY) IN REPLY TO THE HIGH COMMISSIONER FOR THE MALAY STATES TELEGRAM DATED 14TH SEPTEMBER, 1932.‡

(1st) ACTUALLY" should read "Carefully." No actual agreement has been signed though the draft has been definitely agreed to, and the terms cannot now be

altered.

The supply agreement is for a minimum period of 12 years, and the tariff consists of a fixed charge of £600 per mensem, plus a unit charge of 1.2 cents. When the inclusive charge per unit equals 1.75 cents, which figure is arrived at on a sale of 11,218,900 units, all further units will be charged at a flat rate of 1.75 cents.

* Enclosure in No. 19.

† No. 19.

C. 92302/32 [No. 39]: not printed.

No. 22.

THE SECRETARY OF STATE to THE HIGH COMMISSIONER

[Answered by No. 23.]

(Confidential.)

SIR,

Downing Street, 27th September, 1932.

WITH reference to your Confidential telegram No. 213 of the 14th of Sep- tember, in which you request further information regarding the proposed purchase by the Perak River Hydro-Electric Power Company Limited, of the Steam Power Station of the Malayan Tin Dredging Company Limited, I have the honour to transmit to you three copies of a memorandum‡ which has been prepared by Mr. Cochrane with the assistance of the Company's Secretary.

2. As stated in my telegram No. 149 of the 7th of September, § all the points raised in your telegrams have been carefully considered here. It seems clear that the proposed arrangement is in the interest of the Company and ultimately in the interest of the Federated Malay States, and I shall be glad to learn as soon as possible whether, after further consideration, you are prepared to give it your approval.

I have, &c.,

P. CUNLIFFE-LISTER.

Enclosure in No. 19. + C. 92302/32 [No. 39]: not printed.

§ C. 92302/32 [No. 36]: not printed.

‡ No. 21.

سم