The full text of Mr. Nicholas Bil's report on the Shanghai Waterworks Ca. Ltd., a resume of hich was published in the "North-ina, Daily News" in October ast, is" published by the Shanghai Municipal Council, in a cial issue of the Municipal gazette, In addition to the matter that was issued earlier for publica-Son, there now appears a report by messrs, Thomson. & Ca., prepared to facilitate the investigations of My, Hill, who was the visiting ex-invited to go into the matter.
first four parts of. Messrs. Thomson & Co's report deal with statements of fact, but Part V which deals with Conclusions and Recommendations is interesting enough to merit reproduction, Part 'V- is as follows:
On examining the last Table in Part IV hereof, we find only two abnormal increases in cost which in our opinion require particular comment having regard to all Gireumstances previously indicated, These are the increases in cost of! Managenient. and Dividends on Share Capital, The somewhat abnormal rise in cost of Management. in 1927 already been dealt with, and following this the increase. may be re-farded as normal in view of the de creasing value of silver and. the gradual introduction of 'a. more highly qualified, and consequently more highly paid, technical staff to cal with the increasing difficulties and problems caused by purely local Conditions. " Among. such conditions may be mentioned the recurrence of strikes; increased pollution; me creased efficiency and economy called for by the rising cost of Eupplies and the necessity to deal with a growing demand without involving additional expenditure en land: for filter beds, etc. The Abnormal increase in 1980 appears Novus to be enrively due to the whdden drop in exchange (as preiously explained), and, if this had not occurred, it appears propable that an actual economy. in ess might have been effected. Tu this connection it is. important t6' note that Chinese Salaries and Wages have increased owing to the present. higher cost of living, though in. a lesser degree, since: the foreign. employee is" more Girectly affected by & fall in ex-
Having regard, therefore, to all known circumstances, we conclude that the increased east of Manage: ment, while being abnormal, entirely explicable on the lines mentioned above, and may, there-ore, be considered as reasonable.
The increased cost due to (a) in-grease in Capital required and (6) the fluctuation in value of silver, appears fairly normal until the year 43540 when the silver slump began, Although the average rate for 1080 was 1/8.395, it must be remembered That' the final dividends for the year could not be paid until the Tael rate had further receded to 2/34, "thus making the difference Between the dividends paid for 4930 and those estimated for 1991 Weg than might be anticipated.
The whole crux of the matter would appear to be in this question; that the Company. has a Sterling capital on which dividends are. guaranteed under the Tai? Agreenient in Sterling, while the Avetuation of the. Silver market stan unknown quantity. can, therefore, only conclude that fo long as. the' present agree of Water to the consumer will be ment Wenning "in force, the price largely dependent upon the price silver. This state. of affairs ain "only be remedied in part, in #0 far as any new capital required meet a growing demand can be vained in' local currency instead of in Sterling. Presuming this can irone, it ig obvious that ax the proportion of "Silver Capital to the whole Capital involved me creases, the dend-weight of the Joss on' Sterling capital under. the existing Tariff" Agreement. will be Gecreased accordingly. 'The pre tent effect of the incidence of exchange is clearly indicated when we. note that the total increase in 'All coste for 1980. (over the cost for 1999) was Tis, 45.678 per. M. G. of: which Tis, 35:650 was' due extra cost: of Dividends (Note? Tperease in. capital being theovetically offset by. increase: in pum nally, with the total cost_ of production "in 1930 increased "by 92 per cent, over the 1929 cost is obvious that the 25 per cent. for charge was lustilied under ex: sting, circumstance, a of the objects of thit Report (nee apply.—Referring to the first Page 3), we note the words "+244 in particular in finding out whether the cost of water to consumers can be: reduced."
We have already inferred above that' in our opinion' the cost Supply is regulated as _economi cally "as" possible having. regard the necessity for efficiency and to the difficulties due to local conditions." The remainder of this part of the' problem, therefore, appears to us. to be purely an. engineering, question, and "we can only. recom mend that the policy already adopted by. the Engineer-in-Chief who has introduced the system "of rapid iltration, the. use of more economical units and other general improvements, should' as. far as Possible be implemented under out-Side expert advice.
We recommend. the careful con-deration of the Engineer-in-Chief's Feport dated October &, 1930, on the subject of General (Metering, particularly having regard to its bearing on the very costly waste of water by certain sections of the consumers, and. the consequent increased cost Scheme in adumbrated _esti-Jot supply to all consumers, The
mates a minimum annual (gross) saving of Tis, 288,000 from which must "be dedveted the net annual Jeost_ (including. depreciation and interest) Tis, -125,000,. leaving a net annual saving of Tls. 178,000. Of this sum. Tis, 40,000 pa. would be in respect of Waste Detection fand the balance would be a relict to\the general cost of supply.
Personnel—We have already stated that' the increased cost management is not abnormal having regard to the highly-qualified European technicians employed to obtain the "highest. possible ficiency, and the incidence of the Silver slump Jon their salaries. The only possible! innovation to counteract, this in~ teasing cost would be the gradual introdvetion of properly qualified Chinese engineers and technicians who could (if obtainable) be employed. more economically owing to their. cost. of living not being directly. affected by. exchange, and their not requiring Home leave, provision of passages, superannuation, medical attendance, etc," We hesitfate, however, to. make" this recor fmefdation at the present: time View of the. following circum stances:—
(i) At the present time it, would appear almost impossible to obtain. Chinese engineers and technicians with the. quired experience of Water-Works mapagemen (li) The political situation such that while the Waterworks Company remains under foreign ownership and management, Chinese officials could hardly be depended upon in the event of a general strike or serious political trouble, since they might at} any, time be foreed to cease work even against their own desire, We would recommend, therefore that no change be made in the gen-Jeral personnel of the management until such thee as China may have settled down to conditions approximating those which exist to-in Europe and America.
While we have stated that salarjes now paid cannot be regarded as we consider that an adjustment of the exchange allowance to the same basis as that applied by the Municipal Council should in due course be effected. The system of grading all staff agreements under the main headings of "Local" Abroad" as adopted by the Munici pal Council also appears to be fair Jard reasonable, and we would re-
Jeommend the adoption of similar methods by the Company, as regards {future engagements of foreign employees, with a view" to ultimate emoluments. (See.
"al Council's "General Terms Jand Conditions of Service, Foreign Employees," dated December 18, 1930).
The Engineer-in-Chie('s estimates lof capital required for the next three rears are as follows:—1081: #84,271 (at 1/3) avd Tis.
Text read from the printed page and cleaned; old type leaves the occasional error.