66
C.
(c) The increase in cost of junk hire has raised the
price of sand.
(d) Sand, as delivered from Government bins, is not washed or graded, and is of inferior quality. To use it, it has to be screened or washed by the contractor, who naturally passes the cost of this on to the building. Although grading was not carried out by Government before the war, sufficient stocks from various beaches were held segregated, permitting the most suitable sand for any purpose to be selected. There are at present not sufficient stocks to allow of this practice, and contractors are forced to accept 'sand" as such, whatever the quality.
Transport.
The main reasons for increases in transport rates are again shortage of carriers, resulting in opportunism on the part of owners, coupled with the large demand.
(a) In the early days of the reoccupation, there was A serious shortage of vehicles and vessels for local transport, and few facilities for upkeep and repair. As far as road transport is concerned, there seems now to be no shortage, but most vehicles have been bought from hard currency areas, and the cost of petrol is high. Most of the present transport is under the control of one or two large com- panies and the traffic authorities are becoming increasingly loathe to issue more carrier licences.
(b) Many parts of the Colony even to-day are inaccessible by road transport and recourse must be made to the more expensive man handling.
(c) The necessity, peculiar to Hong Kong, of having to trans- port materials across the harbour has resulted in high prices. This transport is slow and expensive. The capacity of the vehicular ferry has been far below the demand so the principal means of transport has been by junk.
(d) The cost of junks per day, has risen to as high as $160 per day compared with $60 before the war, for a 50 Ton junk.
(e) There is no doubt that junk masters have taken advantage
of the shortage of cross-harbour transport.
D.
Land.
The high price paid for land, both in purchase and for temporary use, has raised building costs.
(1)
The high prices paid for land have directly contributed to the high rentals paid by labour for accommodation, and have resulted in higher wage demands.
(a) High land prices are due largely to the large influx of wealthy new-comers, resulting in speculation. combined with the shortage of immediately available new sites.
(b) High land prices have encouraged "unofficial" prac- tices, such as the extortion of key money, which is used as a means of recovering "excess" prices paid for land.
(c) Since there are no rent restrictions on new buildings, high land prices are the basis of a plea for charging exorbitant rents in addition to or instead of charging "key money."
(ii) The higher cost of permits for temporary occupation of Crown Land is given as an explanation of the higher cost of manufacture, preparation and storage or materials.
(iii) The delays which now occur in negotiation for the pur- chase of Crown Land also contribute to high costs and serve as a deterrent to development.
Finance.
E.
The cost of financing building operations has increased, and is due to the high rates of interest required.
(i)
Construction in Hong Kong is relatively slow, due to adherence to old fashioned methods of building, lack of materials, and shortage of skilled labour and organisation. (a) The slowness of local building ties up considerable sums of money for relatively lengthy periods, the cost of interest being charged to the building. (b) Delays caused by non-arrival of materials increase the overhead costs of the building considerably. (c) Shortage of skilled labour and organisation lead to slowness of work, waste of effort, redoing of defec- tive work, and resulting increased cost.
(d) Slowness in settling accounts is responsible for higher interest costs, which must be borne by the building.
(ii) High rates of interest for building work are charged by financiers owing to the general tendency to inflation, and the high rates of profit obtainable in other fields. Low interest rates are not available from official
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