ENG-1955 — Page 21

6

HONG KONG ANNUAL REPORT

that was compatible with security of supply, and that the system would be retained for another year.

DEVELOPMENT

For the first time since the war the Colony's Budget for 1955-6 provided for a small deficit on current account. This was chiefly due to the extensive programme of public works, already referred to. The total estimated cost of the public works being undertaken during 1955 is $107,000,000, out of a total expenditure of $449,000,000. Improved revenue collections, due partly to the slight economic recovery from the recession of the previous year, combined with certain minor delays in carrying out so ambitious a public works programme, made it seem unlikely, at the end of 1955, that a deficit would in fact materialize.

One of the most serious internal problems connected with the growth of the Colony's industries is the provision of suitable land for an ever-increasing number of factory build- ings. The built-up areas of Victoria and Kowloon are chiefly commercial and residential, and must obviously remain so. In the New Territories, most of the land is extremely hilly, and in areas within easy reach of Kowloon the conveyance of water to upland sites, even if these could be developed, would involve numerous difficulties and high expenditure. In well- watered areas, every square foot is used for agriculture, and there is little space for industrial development. It was accordingly decided in 1954 to start work on the reclamation of a large area for factory development at Kun Tong, on the N.E. shore of Kowloon Bay. This is well out of the residential zone, east of Kai Tak Airport, with easy access to Kowloon. Fill for the reclamation is provided by the levelling of hills which have to come down in the main urban area to allow for more intensive housing development there.

Progress was made during 1955 on the first stage of the Kun Tong reclamation, and it seemed likely that the first lots would be ready for occupation by the middle of 1956. It is clear, however, from the number of applications for sites, both from new industries and factories at present in unsuitable buildings, that the earlier idea of doing the reclamation by stages will not meet the need. The full area planned for the final stage will be required as soon as possible. The Govern- ment announced that in allocating land to industries it would not depart from its established policy of awarding leases by