emman and reserves in each of the two accounts amount to approximately ID. 1,300,000. It is with the help of the reserves in the Bar Dredging account plus future earnings from dredging dues that it is hoped to finance the dredging of the new channel. F1445/4595193 Para.5(vi). The Shatt al Arab. Indept 20/10 The position about the Shatt al Arab, Umm Qasr and Fao has already been deseribed at some length in our despatch E 178 (280/4/49) of the 14th September. The figures in para 5 of that despatch show that there is unlikely to be congestion in the Shatt for a good many years to come, and that if the Basra Petroleum Company go ahead with their idea of constructing a pipe line to a loading point near Fao, there should be no difficulty about providing for their shipping requirements. The position about the loading point at Fao is that the Company have written to the Iraq Government to tell them that they intend to proceed with the project, but have not yet had the Iraq Government's reply. Nor have they had the Iraq Government's reply to their letter saying that they are prepared to put up ID. 10,000 towards the cost of the survey of Unam Qasr. No decision has yet been taken about who would pay for a port at Unun Qasr or about the exact uses to which it would be put. It is certain, however, that it would take more than the year or two contemplated by Harrison to build the port and provide all the ancillary services. As regards the possibility of the Persians making off with a part of the dredging dues if they were to be given a share in the conservancy of the Shatt under a joint agreement, we do not think that this is likely to happen since, as mentioned above, these dues are paid into a separate dredging account. Our general comments on a Shatt al Arab Conservancy Convention are contained in Sir H. Mack's letter to Furlonge 520/23/49 of the 14th December and in ano ther which is now in preparation here. Para.6. Inland Water Transport. € 15359 In dept - Recent correspondence with the Foreign Office (Foreign Office despatch No. 286 (E14111/13 94/93) of the ist December) shows that there is little likelihood of anything being done to keep alive the Euphrates and Tigris Steam Navigation Company, and that it will almost certainly be wound up shortly. Para.10(i). 12/1393/42 E15125/1391/93 The question of Col. Johnson's contract has already been dealt with in Trevelyan's letter of the 12th December to Consul-General Basra, a copy of which was sent to you, and there is no need to say anything more about it here. The problem of finding suitable men to take up technical appointments in the Port is one with which both you and we are unfortunately only too familiar. We are sending copies of this letter to Basra, B.M.E.O., Tehran and Bahrein. EM лв. Yours ever, FISH CHANCERY. 0 g&
