CO129-598-2 Tai Lam Chung Reservoir Project 24-6-1948 - 3-3-1949 — Page 87

financing the scheme from either the Colonial

Development and Welfare Fund or the Colonial

Development Corporation has been considered.

It would

not, however, be possible to allocate to one Colony, from

the remaining funds available under the first head, a sum approaching that required

is

of the order of £4,000,000;

a

and it appears that this was

not the type of project suitable for financing by the

Colonial Development Corporation.

4. In the circumstances, the possibility of financing

the scheme from local resources was discussed with Mr.

Follows; and it seemed that it might be possible to

provide about $6,000,000 a year from revenue balances,

and in this way at least partly to finance the scheme

over the period during which construction w as gradually

taking place. To the extent that it might also be

necessary to raise additional funds, this might be done

by way of local loan or by a premium bond issue.

This would not, I realise, be an ideal solution to the

problem and it might mean that the scheme could not go

forward as quickly as you would wish. I should, however,

be prepared to agree to a start being made on this basis

and if it later proved necessary, I would see no objection

to the present loan limit of $150,000,000 being exceeded

if this proved to be necessary in order to supplement

which could be

the funds provided from revenue. In this connection

I suggest for your consideration the possibility of a

premium bond loan. I realise that one objection to

such a loan is that it would be necessary to announce

the amounts of the annual premia to be paid on bonds to be

drawn, before the extent of the public subscription to the

loan

were

was known; and thus if the loan were not a success

the/

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