1957-1958 — Page 15

In addition a loan of $1m was made by Government when the Authority was first constituted, in order to meet administrative expenses during the period when an organization and staff were being built up, and building operations initiated-in other words to 'prime the pump.' It is not intended that recurrent expenditure will continue to be met from this loan once rental income accrues, and expenditure from it will be capitalized within the various schemes as they mature.

Overhead expenses will be charged against the various projects as they proceed, roughly in proportion to the number of tenancies in- volved. For instance, this will be 15% for the North Point Estate, and 5% for the Cadogan Street Estate. The North Point, Cadogan Street and Administration Loans were all made with interest payable at the rate of 3% per annum (calculated on maximum indebtedness during each month, and compounded half yearly in March and September). In October 1955, however, Government notified the Authority that for all future schemes, i.e. from So Uk onwards, the interest on loans would be at the rate of 5% per annum.

The Authority therefore decided that in order to avoid any rent differential, the rents on the North Point and Cadogan Street Estates should be calculated as if amortization was at 5% rather than at 34% per annum. This equates those rents with those which will obtain on future estates, and at the same time provides a useful contingency reserve. Rents will be fixed by calculating the direct annual expenditure on each estate, and then assessing a standard rental, which will give a basic rent per flat adjusted in detail according to relative quality, position, etc. Income arising from shops (of which there will be some on most estates) will also be credited to a contingency reserve.

The policy of the Authority is directed to securing that in any period of three successive years after 1st April, 1956, its revenue shall be sufficient to meet all its outgoings, other than those chargeable to capital expenditure accounts.

At the end of the period under review the Authority's indebtedness to the Government stood at $36,070,818.61. This sum has been expended as follows:

Capital cost of North Point Estate

Capital cost of Cadogan Street Estate

Capital cost of So Uk Estate

Capital cost of Clearwater Bay Road Estate Administration expenses (including salaries of staff)

A

$31,985,261.67 $2,950,850.32

$440,860.71

$10,075.00

$683,770.91

Interest payments to the Government were running at an average of $101,100 a month.

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