CO129-626-9 Wholesale vegetable marketing scheme 1-2-1951 - 30-11-1951 — Page 92

54403/8/51

C.D.W. (D) No. 2038

HONG KONG

Replacement of part of lorry fleet of the Vegetable Marketing Organisation

Grant of £9,375 and Loan of £9,375

189

In September, 1946, a Government wholesale vegetable marketing scheme was established in Kowloon and the mainland part of the New Terri- tories. The aims of the scheme were set out in memorandum C.D.W.A.C. No. 1298 of 13th January, 1949. The system is largely responsible for the stability of vegetable prices which in turn helps to prevent serious fluctuations in the cost of living. The provision of adequate transport is a vital factor in ensuring steady prices by the guarantee of regular supplies.

2. The Organisation at present has a transport fleet consisting of sixteen 5-ton diesel-engine lorries and thirty-two 3-ton petrol-engine lorries. The diesel lorries were purchased under Colonial Development and Welfare Scheme D.1066 (see memorandum C.D.W.A.C. No. 1298 of 13th January, 1949 and Mr. Armitage-Smith's letter to Mr. Mackay of 2nd June, 1949) and have proved most suitable during the past twelve months. The petrol lorries are ex-military vehicles which the Organisa- tion hires from the Public Works Department. These petrol lorries are nearly worn out and, with spare parts now difficult to obtain, there are seldom more than twenty lorries available; the Public Works Department is accordingly anxious to take the vehicles off the road and replace them by fifteen 5-ton diesel lorries. Only in this way can the present effi- ciency of the wholesale marketing system in Kowloon be maintained. The ten per cent commission now charged is sufficient to cover the running costs of the Organisation but there is no margin for heavy capital expen- diture.

3. It is accordingly proposed to provide assistance amounting to £18,750 for the purchase of fifteen 5-ton diesel lorries, compared with the sixteen lorries purchased for the same amoun in 1949. Although the Organisation has insufficient funds to allow for large capital expendi-

It is ture it is desirable that it should shoulder some responsibility. therefore proposed that following the arrangements under Scheme D.1066 assistance should take the form of grant and loan in equal proportions.

Consideration of the terms of repayment of the loan under Scheme No. D.1066 were deferred until 1952, the loan being interest- free until that time. The Vegetable Marketing Organisation is in fact

It is making provision for repayment over the next three years. suggested that the terms of repayment of the present loan should likewise be left over for three years, i.e. until 1954, the loan being interest- free until that time, If in the meantime the Vegetable Marketing Organisation passed out of Government control into the control of a co-operative society the question of repayment would be considered at the time of the changeover.

5. The usual financial summary is attached.

Colonial Office.

8th May, 1951.