CO129-623-8 Estimates of Expenditure- includes a report for the year ending March 1951 1-12-1949 - 31-3-1951 — Page 61

-3687/50 (afe-)

The Church House,

Great Smith Street,

S.W. 1.

22nd July, 1950.

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61

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Now that the supplementary financial settlement with Hong Kong has been concluded, it is desirable to consider the Colony's lom requirements for development purposes. The two major items on the development programme are the Tai Lam Chung reservoir project and the Deep Bay airport. project in the New Territorios estimated to cost $100 million, (£6 million) end £160 million (£30 million) respectively. Consideration of the financing of the airport project can be left until the Air Ministry report on the recent survey is available and we have had time to study it. In any case, if the decision to proceed with the project is maintained, the work will have to be spread over several years, and any financial assistance required by Hong Kong can in the initial stages be covered by His Majesty's Goverment's loan of 8 millims. This letter is thus concerned with the question of the water supply project which was recently discussed with Grantham (the Governor) who is at present on leave in the United Kingdom. Our last despatch to Hơng Keng on the subject was No. 236 of 6th October, 1949 (copied to Russell Edmunds) in which it was agreed in principle that the project should go forward, subject to the financial' difficulties being overcome, and to the limitations imposed by the Colony's pre-occupation with defence. Hong Kong is thus committed to going ahead with this project, in spite of the present international situation, but even though the project will take several years to complete, it is necessary

/ that the

A. H. Clough, Esq.,

Treasury.