SECRET
SECRET
A W Gaminara Esq
Hong Kong Department
Foreign and Commonwealth Office
Room 247
King Charles Street
London SW1
HONG KONG AGREEMENT
FROM R J SMITH
DEPARTMENT OF THE ENVIRONMENT
MINISTRY OF
PUBLIC BUILDING AND WORKS
LAMBETH BRIDGE HOUSE, LONDON S. E.1
Telephone: RELiance 7611
RECEIVED IN
REGISTRY No. 51
23 SEP 1971
PKKIO/9
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237
219
20 September 1971
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I refer to the latest telegram No 668 of 16 September from the Governor.
The wording of paragraph 2 is a little strange in that it refers to the review of capital costs and not to the agreement as a whole. The Governor is probably not trying to introduce a new interpretation, but we must be certain that there is no misunderstanding.
We have recently been concerned about the capacity of the Hong Kong PWD to carry out the future capital works programme because over the last month or so they have, we understand, been hesitant about taking on the extra staff required for the increasing work load in the absence of an agreement. Bearing in mind that the agreement will have effect retrospectively from 1 April 1971 there could be argument in later years as to the responsibilities for any underspending of the £17 millions. It is therefore important that it should be accepted by the Governor that adequate PWD capacity is a prerequisite.
There is another point which has not been made previously as it did not until
This is that it is recently appear to be significant enough to be worth mentioning. possible, and indeed likely to some extent, that purchase will need to be resorted to
The need could instead of new construction particularly as regards married quarters.
Although arise for one of several reasons e.g. cost or to relieve PWD capacity. purchase would not have the same effect as new builds of new married quarters in increasing the total accommodation in the Colony the other arguments for purchase seem in certain instances likely to be to the advantage of the Colony. To put the point another way we do not wish to be put in the position of having to persuade the Treasury that we must undertake a new build of a particular group of quarters which is more expensive than purchase of an existing block merely on the grounds that Hong Kong will pay for the former but not the latter. There is at least one precedent for purchase quarters being treated as capital works and we have no particular reason to
However, the suppose that the Governor will object to it under the new agreement. point needs to be registered now so as to preclude any misunderstanding.
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