§ Mr. GINNELLasked the Under-Secretary of State for the Colonies whether the commission of 1 per cent, sanctioned by the Memorandum of February, 1904, on the cost of rails, girders, cement, rolling stock, and all machinery, materials, and stores obtained through Crown Agents, is still paid to them through the fund out of which their salaries come; whether they still, as then, enjoy patronage in the placing of orders for all those things; whether all correspondence between Colonial Governments and consulting engineers in reference to works or proposed works in Colonies and Protectorates still passes through their hands; whether any check is imposed upon the power which these circumstances give them of excluding contract by public tender, whereby they would lose those advantages, and 256 getting works done departmentally, whereby all those advantages accrue to themselves; and whether, apart from Crown Agents and other persons interested, the Colonial Office has got any independent approval of the departmental as compared with the system of contract by competitive tender?
§ The UNDER-SECRETARY for the COLONIES (Colonel Seely)The commission in question is not paid to the Crown Agents personally, but is paid into the fund out of which the expenses of the office, including the Crown Agents' salaries, are defrayed. As the Grown Agents can only act under instructions from the Colonial Governments, they cannot be said to enjoy actual patronage in regard to orders. Their general practice is to call for tenders in respect of each order from firms on their books, following in this matter the usual practice of the public Departments in this country. I would refer the hon. Gentleman to the evidence taken by the Committee of which I was chairman, and particularly questions 1466, 1935–8, 2030–5, 2300, 2863–88, 4682. All correspondence between Colonial Governments and consulting engineers passes through the hands of the Crown Agents. As stated just above, the Crown Agents can only act under instructions from Colonial Governments, and though they may be invited to give advice in a given case it rests with the Colonial Government, subject to the approval of the Secretary of State, to determine whether in any particular case a work is to be executed departmentally or under a contract. The question whether a work should be carried out departmentally or by contract is determined in each case after full consideration of the circumstances, and there is no stereotyped preference for either system.
§ Mr. GINNELLI wish to ask if the hon. Gentleman knows of any elements or conditions favourable to the creation and maintenance of monopoly which the Crown agents as a body do not possess?
§ Colonel SEELYI do not quite understand the question of the hon. Gentleman.
§ Mr. GINNELLasked the Under-Secretary of State for the Colonies whether he is aware that the Government of Johore hold an estimate by Mr. Slessor, civil engineer, of the cost of the Johore Railway amounting to £608,000, and an offer from a responsible firm to construct it for that 257 sum; that the Crown Agents availed of their power to prevent the acceptance of that offer, and to have its construction entrusted to themselves; that under them it has cost £1,400,000; that it was not subjected to any independent inspection before being opened for traffic; that, owing to defective construction and insufficient waterways, bridges and embankments have been washed away and traffic interrupted; that the cost of restoration, though due to defective construction, is charged to maintenance in order to be paid out of traffic revenue; whether that method of concealing real cost of construction is usual in Colonies and Protectorates; whether any levy is made upon the revenues of the Johore territory for payment of interest or repayment of the principal sum spent upon this undertaking; and when he expects to be able to make available a full financial statement of the construction and working of this railway?
§ Colonel SEELYI understand that Mr. Slessor estimated in 1891 that a light line with cheap rolling stock and buildings, light rails, and severe gradients could be constructed for £608,000, but I am not aware that any offer was made to construct a line for that sum. In any case there can be no comparison between such a line and the line which has now been constructed with heavy rails, easy gradients, and first-class rolling stock. The line is a little over 120 miles long, and it was always recognised that, if it was to be up to the standard of the Federated Malay States lines with which it is connected, it would cost about £10,000 a mile. I am aware that the Sultan at one time wished this line to be constructed by a firm of contractors, but with the approval of his Advisory Board he abandoned this idea, and agreed to the construction being undertaken by the Railway Department of the Federated Malay States, the cost being advanced by the Federated Malay States on very easy terms. The Crown Agents were not concerned in the matter at all, and I have already pointed out in answer to previous questions, that they do not construct railways. I do not know the total cost of the line, but the Estimate given in the Convention between the Sultan and the Federated Malay States Government was £10,000 a mile, or, roughly, £1,200,000. Under the Convention the Government of Johore was entitled to satisfy itself, before taking over any section of the railway, that it had been constructed in accordance with the Convention. It may be assumed that this has been clone. I have no informa- 258 tion as to any defects in the construction of the line having been discovered, and, as it appears that the first public train was run on the first day of this month, I do not understand how traffic can have been interrupted. The Convention specifies what part of the expenses of the railway is to be regarded as capital cost. The cost of the railway, with interest at 3 per cent. on the capital cost, will be repaid to the Federated Malay States by Johore. I do not anticipate that full details as to construction and cost will be available for some time.
§ Mr. GINNELLasked the Under Secretary for the Colonies if he will say who was the consulting engineer on whoso advice the changes of the Kowloon Railway were adopted which are alleged to account in part for the increased cost of construction; was it through the Crown Agents that advice was obtained; was the estimated cost of the changes tested by inviting public tenders; whether he is aware that the purposes of the line are commercial; and whether any competent person has estimated that the line can when working ever repay the principal or any interest on the money spent upon its construction?
§ Colonel SEELYThe railway is being constructed throughout in accordance with the advice of the consulting engineers, Sir John Wolfe Barry and Partners. It is the custom for correspondence between the Colonial Office and the consulting engineers to pass through the Crown Agents. As the line was being constructed on the departmental system, it was obviously out of the question to invite tenders in respect of part of it; the line is being made in the interests of the trade of Hong Kong, and it is confidently expected that either directly or indirectly through the increase of trade with the interior of China, the Colony will be amply repaid for the money expended on construction.
§ Mr. GINNELLasked the Under-Secretary for the Colonies if he will state the gross amount of the percentage on cost of supplies received by the Crown Agents' Department, by authority of the Memorandum of February, 1904, in each financial year since the date of that Memorandum as shown by the audited accounts; whether there is any statutory authority for payment by way of a percentage on expenditure; and by what means does the Colonial Office try to prevent that mode of payment 259 operating as an incentive to exclude the system of contract by competitive tender and increase the expenditure in order to increase the percentage?
§ Colonel SEELYThe gross amount of the percentage on cost of supplies received by the Crown Agents' Department in the year ending 31st March, 1905, and succeeding years, as taken from the audited accounts, is as follows:—
| £ | s. | d. | |
| 1st April, 1904, to 31st March, 1905 | 19,929 | 16 | 8 |
| 1st April, 1905, to 31st March, 1906 | 18,374 | 7 | 8 |
| 1st April, 1906, to 31st March, 1907 | 23,787 | 16 | 10 |
| 1st April, 1907, to 31st March, 1908 | 27,109 | 14 | 6 |
| 1st April, 1908, to 31st March, 1909 | 26,756 | 12 | 7 |
§ There is no statutory authority for such payments, and none is needed. The authority, as in all cases of Crown Colony administration, is that of the Colonial Governments, subject to the approval of the Secretary of State. The payment of a percentage on cost of supplies cannot have the effect which the hon. Gentleman indicates, because the Crown Agents do not decide how any given work is to be executed. As I have stated in reply to another question, the Colonial Government concerned, subject to the Secretary of State's approval, decides in each case whether the work is to be undertaken Departmentally or through a contractor.