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19 PUBLIC RECORD OFFICE, LONDON

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10 July 1908.

CROWN AGENTS' ENQUIRY COMMITTER:

Mr. E. WALKER.

supplies to the Government-Yes, from time to time we have done so, but only when the Government ran short of its own stores or, if I may add, when there was work to be done which the Government could not do in its own workshops.

1751. What is your grievance in this matter, if there be a grievance? What would you suggest as a better system? My grievance is this, as I expressed in the letter to the Honourable Cland Hay, a copy of which 1 think was sent to you, that this Order means in its practical working that those who go out and establish industries in our Crown Colonies, such as Ceylon and Singapore, are barred from getting any work which the Govertiment has to give out simply because they are resident there, and not here. We feel it a great hard- ship that we who are paying the taxes out there, the duty and the local and municipal taxes, should bo debarred from tendering for any work which the Colonial Government has to give it simply because we are there and not here.

1752. Would you tell the Committee if in your judgment in your business you could supply those ls as well and at a lower price or the same price?~- Yes.

1753 What particular gols are they which you have from time to time sold to the Government?-We For two have sold machinery, piping and cement.

or three years my company had the tender for paper which was alvertised; tenders were called for locally, but now under this Order intimation has been given Intely that no tenglers will be called for locally for any Government supplies.

1754. (Mr. Gibson, These supplies being manufac Tured locally-No, imported. but some of them imported from India or elsewhere. I can give you a better illustration in regard to Public Works, as that is more in our line-the Engineering Department.

1755, (Chairman.) Such as which ---Ceylon has the unique position that in addition to requiring to get all its supplies through the Crown Agents, it runs its own workshops. No other Crown Colony does that; so that when a public work has to be done in Ceylon the Government itself does it, and the material that is required for that public work has to be imported through the Crown Agents, so that Colonial industria! establishments like our own and others there are not allowed even to tender,

1756. For what sort of engineering works—give us instances-Do you mean the Governinent factory?

1757. Yes, what are the things they make or build? Bridge building and buildings themselves, construc- tional work, railway stations and works of that kind. Now we have case after case where we tender for work, and we almost always get the answer that the tender is not suitable, and that the Government think they can do it better themselves, I can give illustration after illustration here which I have brought with me where invariably, although the Government estimate may, in the first instance, have been less than ours, the ultimate issue has been that it was a good deal more, and the Government is not bound down to any penalty as regards time or any other object as a private con- tracting firm would b

1759, Sir Albert Spicer wishes me to ask you--do the Government give you the opportunity of tendering for all these public works?--Very soldan; sometimes, if the Government Department's own workshops are very full up we will be asked to tender, but it is with the ervatest reluctance that any work of that kind is given to private enterprise. You will see from the downl Press (I have got documents here which I will be very plead to leave with the Committee) that time after fime exception is taken to the re-voting of money in the Public' Estimates, money that had been pró- vibed by the Government for public works, and which the Government was not able to complete within the year for which the money was voted, and so it had to be re-voted. The writers of the articles in the Press are unanimous that if the Government Factory can. not be done away with altogether, at any rate private enterprise might be enlisted to assist Government to carry out its works and not have them delayed.

1759. You see, we are getting a little wide of the Crown Agents in discussing this, because, suppose there

were no such thing as the Crown Agents Office, this state of affairs which you regard as a grievance might still exist. Where do the Crown Agents come into this matter? It is an extension of the Crown Agents' sys- tem, and an extension, I would like to emphasise, which only exists in Ceylon, not even in any other Crown Colony.

1760. Does it not exist in Mauritius and in other places-1 beg your pardon, I am subject to correc- tion there. I was thinking of Singapore and Hong Kung.

1761, (Sir Ralph Moor.) Is your contention that the system of purchase by the Crown Agents results in in- ducement, or perhaps more than inducement, a pres stre almost on the local Government to undertake their own work in order that the Crown Agents may supply the material-It would be a little difficult, I think, just to put it in that way. I might illustrate the point. The Colonial Government has a work in hand, it may be the building of a railway station in Colombo, which is a constructional engineering work. The Government there says: "We will do this work our- selves." and then it also says," Unfortunately we can- not order anything locally; we could get the Colombo Ironworks and other engineering works to assist us or to supply the material, but we cannot do that we must get the material through the Crown Agents."

1762. In that event, you see the decision does not affect the Crown Agents. The inquiry here is as to the Crown Agents, and if the decision to undertake the work is first taken by the kcal Government, you cannot blame the Crown Agents; they then supply in the ordinary course, but if you think that the fact that the Crown Agents have to purchase the supplies creates any pressure on the Government to undertake the work themselves, so that the Crown Agents may have the purchasing of the supplies; then the Crown Agents pissition is" affected ?—I could not put it in that way.

1763. (Sir Albert Spacer.) Do you consider that the Colonial Government is the master or that the Crown Agent is the master?-I would say this Office, the Colonial Office; it has to sanction the work.

1764. Of these two the Crown Agent or the Colony. which is the master?-Of the two consider the Crown Agent is absolutely master,

1765. And that the Colony has not the power of settling for itself?—Alsolutely; it is bound by the unler referred to.

1760, (Sir Ralph Moor.) That is, once it is deter- mined that the Government shall undertake to do work itself?-Yes.

1797. That is not a matter within the Crown Agents proving»?---No, but most of our public works there are sanctioned by the Colonial Office here, and then this is the standing regulation. May I say that the Colonial Office does not issue an order that the Colonial Government is not to give out its works on contract; it only issues an order that everything re quired by the Government for Government purposes out there is to be obtained through the Crown Agents, 1768, (Chairman.) You are familiar with the Colonial Regulations, perhaps?—Not very.

1769. Your firm must be or ought to be. No. 383 says: Any supplies which may be procured in the Colony should be obtained by contract after public tender. If, however, no tenders are made or the Governor has grounds for the belief that the tendera sent in are collusive or unreasonable other arrangements may be made. All tenders" (these are local tenders) "will be submitted to a Board of not less than thre persons appointed by the Governor." In your expe rience in Ceylon, would you say that all supplies may be procured in the Colony No, I say that is a lead letter, it is never acted upon,

1770. Let us go step by step. In Ceylon are there supplies which could be obtained by the Government on" reasonable terms in your view 7 ---Many.

1771. That being so, does this apply? Are thew supplies put up to public tender? No. They have been at intermittent pericls. Tenders for drugs for the Medical Department were invited for the year 1906, and a prominent Colombo firm secured the contract. I do not know. the name of the firm.

MINUTES OF EVIDENCE.

Mr. E. WALKER.

In

1772. Was that quinine, amongst other things?—— I suppose it would be for the hospital, with the result, it is stated, that a great saving was affected. future these are to be obtained from the Crown Agents under this Order which has just been revived.

1773. It is only fair to tell you that, of course, we have had different views put before us, and there is another side to the story. You are here kindly giving ns evidence, but in the cours of that evidence 1 think it is only fair that we should tell you that there was another side to the story in that particular instance you happen to give. It appears that the authorities lid not consider that the quality was so good as the price seemed to warrant. That was the opinion they formed, rightly or wrongly. Perhaps you will tell us with regard to this regulation No. 393. 1 understand that great quantities of stores are purchased locally in Ceylon, unly they are things that are of local manufacture or local products. With regard to sucli things as you have to do with, are they things you make yourselves or are they things you import from England?--Partly imported and partly made. For instance, the Government is carrying on important harbour works, and if they happen to run short of material they will draw upon us and upon other erms upon the lowral market, I mean.

1774. For what? Say cement or iron, nails, and so Then there is work alone by the different engineer- ng firms for the Government, partly imported and partly manufactured; take, for instance, teak wood work for the railways and for Government buildings. We import the tenk wood from Rangom and manu- facture it ant there.

1775. 1 might rend the rule to which I think you er, issued in 1904, by Mr. Alfred Lyttelton: It

1 hardly necessary to emphasise the rule" (that refers rule 379) that all orders for goods which are to le obtained in the Unitesi Kingdom or in any country, British or foreign, which is not adjacent to the Colony should not be placed locally, but should be sent to the Cown Agents." (So that if the goals are to be ob

We can

e outsile the Colony then the orders should be seat to the Crown Agents.) “Not oily are the pur chases to be made in the United Kingdom, but also when it is necessary to buy in the Continental markets is, in my opinion, in the interests of the Colonies. d well as expedient on more general grounds, that the orders should be executes through the Central Ag ncy." A that that meatis, you see plainly from the wording of it, is that goods to là obtained from outside the domy should be obtained from the Crown Agents lore and not tendered for locally. So that if it were me gels which, of course, plainly are not made in the Colony, and are not the product of the Colony in any way, then they are obtained from the Crown Agents, and that decision. I think, is hardly worth

ur while at present to question. What

quire from you is whether it is enrried out. To in with. No, 353: "Any supplies which may be prveured in the Colony should be obtained by contract after public tender.” In your experienes are goods. which may be obtained in the Colony and which are in ny serise the product of the Colony, obtained by public Dender? Yes." I think that would be the case, but I must say that I have very seldom seen any tender. Of course, it is very little Ceylon produces that the Government would require, hit I think we want to understand exactly what you mean by the word ** goods," You see, the Colonial Government interprets that to mean not only what we should understand in the way of goods, such as merchandise, but if it comes to a constructional work ten·lers are called for that work in this country, not out in Ceylon, and the manufacturer here gets his tender necepted and the work is passed through the Crown Agents.

1776. Of course, it is done by people on the spot, suppose, mostly not many people go out from home for the purpose of doing the work ---Sometimes they d; they may employ local labour, but sometimes even the labour is sent out. May I quote a case? It was referred to the Colonial Office, so that you have the whole of the correspondence in this office. It was in the year 1808. Grain sheds were to be erected in Colombo, and tenders were called for here. They were Fent out to Ceylon for the Government's inspection. We asked the Government if we might tender, and the

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[10 July 1908.

Government said "Yes." We tendered, and our esti- inate was £2,000 below the English firm's estimate, but the order was given through the Crown Agents to the English firm.

the

1777. (Mr. Gibson.) Was your tender pat before the Crown Agents-It was put before the Colonial Office, and we got this reply, which emphasises my point: As the tenders received were found to vary very considerably in design they were referred to Colonial Government with a view to ascertaining which design was best adapted to local requirements, but not in order that additional tenders might be obtained in the Colony." Clearly then the Crown Agents or the Colonial Office had ruled that the Colonial Government had gone out of its way, as it were, in receiving even a tender from a loca! Colonia! firm, and although the tender was £2,000 below and we offered to work to the same specification and have the work inspected by Government engineers. it had to go through the Crown Agents.

1778. (Chairman.) What was the date of this?-In 1808.

1779. These wer-grain shels in Colombo?--Yes. I shall be very pleased to leave the whole of the corre spondence and Press notices on the matter, if it is the desire of the Committee.

1780. Are there any other instances of that kind?— Yes, there was a låter illustration. There was an eye hospital, for which the money was subscribed publicly.

1781. Where? --In Ceylon, to build an eye hospital there. The money was not voted by Government, but raise privately, although the Government contributed half of the total amount, putting down pound for pound with the public, as it were. When the work f building this eye hospital was to be given t nate would naturally. Have thought that that work at all events would have been thrown open to public tender.

172. Where was it to be built ?- In Colombo, The Government did it itself, and with the almost invari- able result that the estimate was excevidest very con- siderably, by 13,000 rupees.

1783. (Mr. Bailey.) Did you never hear of extras on any other building except Government buildings?—— Yes, many.

1784. Do you know, as a matter of fact, that almost every building that is erected has extras in con- nection with it?-- A few, but I do know this, that when private contractors, at any rate, out in Ceylon, under- take to do a work within a certain time and for a certain amount, they have to do it or they are penalised.

1785, (Mr. Gibson.) But the Culonial Government is, perhaps, like the London County Conncil, which, when it places work with its own Public Works Department do not make that Public Works Department tender against the local Grms? No.

1796. (Sir Albert Spicer.) Does the 13.000 rupees extra, which the Colonial Government paid its own Public Works Department, for genuine extras, or was it for the work which you tendered for on a certain specification? For the work for which we would have tenderel. The Government Public Works Depart- ment says " We will do that for so much,” and wo say: "No, you require so much," and invariably afterwards there has been a supplementary vote.

1787. Was this 13,000 rupees for extra things not included in the original specification?—No, to carry I have another very out the original specification. striking illustration here.

1788, (Chairman.) We have had the grain sheds and the eye hospital. When was the eye hospital” --I have not got the date. but it was only a few years ago. May 1 quote on that point a leading article in the "Ceylon Observer"?

1780. Will you just please leave it with us along with all your other notes?-Yes. The other illustra tion a very important one-was the magnificent Post ice that was built in Colombo, a very handsome building. Most of the building work in Colombo has been done by private enterprise, by other companies