CAB129-37 — Page 606

The Corporation set out in paragraph 9 of their memorandum their considered view that there are only two alternative courses of action - either to adopt the plan which they have proposed or to abandon the whole scheme forthwith. But is no middle course possible? At first sight such a middle course appears to have much to commend it. Its adop- tion would avoid either of the drastic alternatives postulated by the Corporation - the termination of the scheme, with all that this would involve or a further large scale programme involving the borrowing of another £15-17 million at a diffi- cult juncture in our financial history. Would it not be better to clear in the next two years some "minimum" economic acreage in the Southern Province (say 30,000 to 50,000 acres) and then - unless both the general financial position in the United Kingdom and the prospect of the scheme itself were brighter than now - for the Corporation to settle down for some time to operate their total holdings of say 300,000 acres in the most economic manner possible? This would give the Corporation an opportunity of testing and deciding what would be the most effective longer-term use of the cleared land and it would be in the light of their knowledge that, at a later date, the Government and the Corporation would be able to determine whether the time was ripe for further development work to be undertaken in the Southern Province. Such a view might commend a good deal of support at the present time, When we are being obliged to restrict capital investment. My officials have considered this possibility but have put forward what seem to me very cogent reasons for rejecting it.

14.

Firstly the Corporation have greatly improved the efficiency of their organisation in East Africa. They have already built up the ancillary services such as communications and workshops which will be needed for going on with compar- atively large scale development work. They have available a "striking force" of experienced staff and equipment which is capable of carrying through a clearing effort - which though small in comparison with the original plan will yet employ all their existing resources. It would obviously be wasteful to under-employ this force in what would be no more than a relatively small scale clearing operation. Moreover, a decision to curtail development work would almost certainly result in breaking the force up. It would be the signal to the ablo men in East Africa to seek a new job elsewhere. They would feel that the scheme had seen its death sentence. And once the team of experienced men was dissipated it would be almost impossible to build it up again.

15.

And the resulting asset would have far less chance of successful and economic operation than a total area of 600,000 acres. It would burden the scheme with even greater overheads because the capital expenditure required per cleared acre would be even more disproportionate if spread over only 300,000 acres. Much the larger proportion of capital outlay in the Corporation's programme occurs during the next two years at the end of which the cleared acreage is expected to have reached 300,000 acres, and, although this expenditure is geared to a programme of 600,000 acres, it is very probable indeed that a disproportionate amount, in addition to the sums already spent on preparation, would be involved in undertaking a smaller programme.

16.

Furthermore, a reduced programme would not give the scheme a satisfactory trial. It would of necessity limit development in the Southern Province. 180,000 acres would be the rai Page 366 and Trambo and therefore there would only be cleared ip Toner balances

cleared in the Southern Page 606 of 1097 is the most promising area of the three. Any chance of the scheme Proving its viability would be severely prejudiced, if not lost.

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