NOTHING TO BE WRITTEN IN THIS MARGIN
W(B)L 51-7406
is physically
And financially uspensible fu proporing
ス
it
the
SECRET
the Colony, pays a share (about
6.475 million-
the cost
prarf of the
of minor works and maintenance
carries out on behalf of the
Services by the P.WD. has
worked satisfactorily and is a
system which we should all
presumably be happy to continue.
Is this your intention?
4. The difficulty about a fixed annual
contribution for 5 years is that its value
would inevitably decrease in real terms
over the period. This is an objection to
the present agreement.
It would be more
acceptable here if we could at any rate
have a provision for annual adjustments
to cover pay and price increase, so as to
maintain the real value of the contribution.
I note that this was a suggestion which
was mooted in the course of the negotiations
over the existing contribution and which
you regard as reasonable although you pointed
out that the Hong Kong Government would
have no control over increases in costs.
An alternative which we should be very
willing to look at would be a proposal by
which the contribution increased by a
predetermined amount each year. We would
welcome your views on this.
I
. Finally, our major difficulty is over
the starting amount of the contribution.
am sure you appreciate that in the context
of the public expenditure discussions here,
and the particular problems of the cost of
Defence, Ministers will want to be satisfied
that the amount offered is as much as it is
reasonable to expect. In the light of these
/considerations...