7.
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the last of these in a country of steep hillsides like Hong Kong
has resulted in numerous landslides, and moreover the tunnels
which the Japanese have driven into any convenient hillside have
increased this danger. There are 30 miles of these tunnels all
unsupported and unless they are filled in with all possible
despatch the result may be the collapse of valuable buildings
and landslides involving thousands of tons of earth which in
many cases would block main roads. Thus rehabilitation cannot
be a gradual process. It must be done now, for the damage is
all exposed to the forces of nature and in a few hours the repair
bill may be increased by some enormous sum. Our repair
programme therefore must be the maximum which can be efficiently
supervised by the staff available.
11.
In these circumstances it is inevitable that for the
next two and possibly three years expenditure will bear no
relation to revenue. The apparent gap between the two can
be reduced by meeting as much rehabilitation expenditure as
possible from loan funds. This is desirable when it results
in the balance of expenditure not greatly exceeding the revenue.
This year conditions are so chaotic that it is not practicable
in the time available to obtain any clear cut distinction
between rehabilitation expenditure and normal other charges.
Payments which would fall within the latter category do not in
fact represent normal expenditure as they are swollen by high.
labour costs and completely abnormal costs of material. Moreover
Government is not yet in a position to know what its ultimate
requirements will be in the way of a loan.
12.
By the beginning of the next financial year the
position should be much more normal.
Pre-occupation claims
will have been met and military officers on loan will have
disappeared.
Officers on leave pending retirement will have
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