CO129-623-9 Estimates of Expenditure- includes a report for the year ending March 1952 1-2-1951 - 30-11-1951 — Page 60

59

53687 on whelpp

3.0-

continued to engage the attention of Government. The objection to the scheme has always been the high cost which, with the increased cost of materials, would now very considerably exceed $100 million, but more particularly the fact that no supply of water on any scale would become available during the first six or seven years. My aim has been to work out some modified scheme which, while yielding a rather smaller supply, will do so quickly. No progress was made in this direction until the arrival of the new Director of Public Works, Mr. T.L.Bowring, who at once re-examined the whole project. He has come to the conclusion that it should be possible to construct a reservoir which would provide for a storage capacity of 2,500 million gallons, as against the 6,000 million gallons contemplated under the original scheme. 2,500 million gallons represents a restricted supply for a period of eighty days and thus provides sufficient margin to ensure that the reserves of water in the Colony should never be exhausted except under completely freak conditions which are unlikely to occur. The water would, in the first place, be delivered to the filter beds by pipe line instead of elaborate aqueducts, and would become available wi thin two years. This first stage is only estimated to cost $25 million. The second stage consists of the replacement of the pipe line by permanent aqueducts and the construction of new filters and service reservoirs. This would take three years and is estimated to cost a further $15 million. This appears to be an eminently practical scheme of the type for which we have been searching, and as you are aware, a consulting engineer is to visit the Colony in June to advise upon it. No expenditure other than in connection with his visit will be incurred during the current financial year, and the expenditure in 1952/53 and 1953/54 could, I suggest, suitably be met from the Development Fund.

34.

In accordance with the approval contained in paragraph 4 of your telegram No. 313 of the 2nd March, the Financial Secretary in the course of his budget speech, announced that it was proposed to appropriate a sum of $30 million from the surplus, as at 31st March, 1950, on the trading operations of the Supplies and Distribution Department, with which to establish an Essential Commodities Equalisation Fund, and that the remaining balance together with the trading surplus for the year ended 31st March, 1951, and the net commissions in respect of the financing by Government of Japanese trade, would be earmarked for the establishment of a Development Fund. As has been explained in earlier correspondence, an Equalisation Find is considered necessary to meet possible losses from deterioration and other causes which may be unavoidable, having regard to the abnormally high level at which it is necessary, for security reasons, to maintain the stocks of essential foodstuffs and fuel under Government control. Formal resolutions authorising the establishment of these funds will be submitted to Legislative Council in due course, and it is hoped that the Development Fund will start off with a sum of about $55 million. The intention is that the Fund should be maintained by the transfer of future trading profits and commissions, less interest charges, and when the situation becomes sufficiently normal for the Equilisation Fund no longer to he required, any remaining balance in that fund can also be transferred to the Development Fund if at that time it still seems to be the best use to which the balance can be put. It is considered

Page 60Page 61