CO129-520-6 Railway development- Canton-Kowloon Railway 5-11-1929 - 5-11-1930 — Page 160

3.

172

whom the matter was referred for comment.

7.

With regard to the reference on page 9 of the êo-

gument to the ratio of division of earnings, I may here remind

you that the present ratio is 65-35 for the Chinese Section

and British Section respectively, as laid down in the Working

Agreement This was based upon the hypothetical returns on

the approximate then known capital expenditure for the con-

struction of each Section, namely Chinese Section $15,130,000

and British 3eotion $10,533,000. Since that date considerable

additional capital has been expended on completing both See-

tions and providing facilities for traffic, until at the end

of 1928 the ratio of the respective capital accounts had been

reversed to such an extent that the figures were, Chinese Seem

tion $15,914,900, and British Section $20,401,956.

8.

If the ratio were now to be placed on a mileage

basis, it would be necessary to adopt the principles followed

by British Railways, as exemplified in the Regulations of the

Railway Clearing House, and to add Special Allowances in mil-

eage for exceptional engineering works such as Bridges, Tun-

nels, Docks, etc., which would possibly result in a ratio less

favourable to the Chinese Section than the present one.

I have the honour to be,

sir,

Your most obedient servant,

(SIGNED) V.F.SOUTHORN.

Officer Administering the Government.

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