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XCS(71)12
- 4.
(b) the £2.2 million a year for maintenance and
minor works would be a notional figure only. The Hong Kong Government would be respon- sible for all maintenance and minor works over the period of the agreement, no matter whether the cost was greater or less than this amount;
(c) there could be virement in capital works
expenditure as between one year and another;
(d) all capital works paid for by Hong Kong would
revert to Hong Kong if no longer required by HM Government;
(e) in authorising capital works, maintenance scales and minor works the same criteria would be exercised as if HM Government were paying;
(f) to the extent that HM Government was in any way responsible for any short-fall in the capital expenditure of £17 million over the five year period there should be no increase in the "cash contribution".
Alternative Distributions of Cost
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Ministers are however ready to accept a degree of flexi- bility over the following:
(a) how much of the total amount payable should
be provided in each year; and
(b) how that amount should be distributed between
maintenance and minor works, capital works and a "cash contribution" towards the other costs of the garrison.
These questions have therefore to be examined with a view to determining what precise arrangement should prove most suitable. They are next taken
in turn.
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The difficulty of explaining the need for a substantial rise in the annual contribution is generally appreciated. It is inescapable; but the greater the immediate rise, the more difficult the task of winning public acquiescence in any explanation is likely to become. For this reason the formula outlined in paragraph 5 above contemplated a gradual pro- gression. There should still be advantage in one, even if it is rather steeper. A possibility is to offer £7 million the first year, increasing annually by £0.5 million to £9 million in the fifth year. Another is to pay £7.5 million in each of the first two years, £8 million in the third and £8,5 million in the fourth and fifth
so achieving a lower terminal figure at the expense of a more abrupt initial jump. Many other alternatives could of course be devised, though there would be arguments for and against each. On balance the second is considered preferable.
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