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cash or investments as part of the
Railway assets.
6.
The position in H.K. is, however,
complicated at present by the method of
calculating the Defence Contribution.
This is paid, not on the Railway revenue
figure, but on the Railway cash revenues
less Railway cash expenditure as voted.
Thus any renewal actually made is
deducted from Railway revenue assessed
to
Contributi
ntribution.
Under the present
ordinance there are no means whereby a
renewals fund could escape
Contribution
any more than the present "depreciation"
reserve.
(a)
If actual renewals were met out
of the fund direct and not on Colony
votes, the residue of "special
expenditure", mainly in fact capital
expenditure, would invite disallowance
as a deduction from railway revenue.
(b)
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