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41 Treasury
22. Sar. No.163 from Hay Kay — 11/1/46
Hong Kong
Mr. Woodward, the P.W.D. waterworks engineer, who has now returned to Hong Kong, pressed very strongly for an early decision on the request in 9 for authority to proceed on the preliminary investi- gations. These investigations were estimated at £5,000 and the Governor proposed that the expenditure should be financed from the loan which it is proposed to raise to cover rehabilitation expenditure. Mr. Woodward said, that apart from the necessity of starting the work during the dry season, the Ministry of Supply was not prepared to keep the machinery, which had been ordered from their store of surplus equipment, available for very long. The papers at 11 and 17 and Mr. Caine's minute of the 14th August refer. In the absence, therefore, of any reply to our telegram at 13, or any indication that the Governor wished this scheme to be financed under a C.D. and W. grant, it was agreed that the £5,000 required should be debited to Hong Kong Government funds.
the 75000
The Governor now says that he would like £2,300 to be met from C.D. and W. As the Treasury made it a condition of their agreement that this small sum could not later be transferred to C.D. and W. (see X of my minute of 23rd August) it does not seem possible to meet the Governor's wish on this point.
The Hong Kong Government are not likely to lose by the decision to allocate this expenditure to Hong Kong Government funds since those funds are for the time being financed by a loan in aid from the Treasury and it seems probable that ultimately at least part of this loan will be wiped off as a grant.
The original estimate of the cost of the preliminary borings is now increased by £2,700 see paragraph 3 of 22. Finance Department will no doubt say whether they agree that an application should be made to meet this sum from C.D. and W. grant and if so whether further details are necessary.
Draft telegram in reply to 22 opposite.
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