Palace Hotel, anghai, March 6, 1929.
Sin—L have the honour to submit to your Council a scheme for transferring the Council's Bleetrical Undertaking to Company Control for a defined period on profit-sharing terms, and for providing additional capital as requited, nation on which it rests. is that the Council would be glad to free an undertaking: of which it is justly proud, and for whose saontinued welfare it is rightly nis, from association with political problems that are inherent in the Council's work, and that way promote the economical and distribution electricity; but only on condition that this' can be done without. material sacrifice of the interests of future ratepayers and consumers,—only if, in short, the Premium to be paid for dissociation from polities is amall enough to be worth paying.
'The scheme, though adapted in detail to the Special circumstances of the ease is not in principle unusual. The conduct of public utilities by an independent company' on terms of profit-sharing with a Public Authority is exemplified in various Indian railways and most recently by the British Government's lease of its Beam Wireless system. It is a normal device for combining the advantages of Com-Control with a continued public share in profits and it effects, these objects with the minimum of change in the conduct of the undertaking, and with the economy that oes with the application of the sound principle "new money for new work only." Moreover it provides in a high degree a feature special importance to the public in this case, community of interest between the Authority and the Company.
The Scheme brief the scheme is that a S.M.E. Company lease the under taking on terms of paying for the interest and sinking Fund Instalments on all the Council's Electri city Loans plus a fixed rent of Ti: 2,000,000 per annum. After the Payment of a 9 per cent. dividend fon the Company's ordinary shares, 3 of the surplus profits go to the Council and 4 to the Company. A sliding scale of benefits to con-Sumers is included, which operates. after 10 per cent. is paid, not on the whole capital of the Company, but on the ordinary shares only.
Text read from the printed page and cleaned; old type leaves the occasional error.