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4. IN YOUR FURTHER DISCUSSIONS WITH EXECUTIVE COUNCIL YOU MAY EXPAN
THAT THE FIGURES IN PARAGRAPH 2 OF FCO TELEGRAM NO 553 WERE PROVID
TO ILLUSTRATE THE KIND OF ARRANGEMENT THAT HMG WOULD BE PREPARED TO ACCEPT AND THAT IN THE EXAMPLE GIVEN THE BALANCE OF CAPITAL
WORKS PROGRAMME ABOVE POUNDS 15 MILLION WOULD BE PAID FOR BY HMG.
IF IT WOULD HELP YOU IN PRESENTING THE TERMS TO YOUR EXECUTIVE COUNCIL THERE WOULD NO OBJECTION(SUBJECT TO PARAGRAPH 5 BELOW) TO INCREASING THE CAPITAL ELEMENT TO POUNDS 17 MILLION AND REDUCING
THE RECURRENT CASH ELEMENT OF THE CONTRIBUTION AS INDICATED IN
PARAGRAPH 2 OF YOUR TELEGRAM NO 528 PROVIDED THAT THE TOTAL ANNUAL
CONTRIBUTION REMAINED AT POUNDS 8 MILLION OVER THE FIVE YEAR PERIOD. (YOU ARE DOUBTLESS AWARE OF FACT THAT INCLUDED IN CAPITAL ELEMENT OF POUNDS 17 MILLION IS SOME POUNDS 1.3 MILLION WORTH OF WORK BEING
EXECUTED DIRECT BY DEPARTMENT OF ENVIRONMENT.L
5. HOWEVER, IN ACCEPTING THIS HMG WOULD NEED SOME MODIFICATION OF 126) THE CONDITION SUGGESTED IN PARAGRAPH 3(B) OF YOUR TELEGRAM NO 528.
126)
IT IS ACCEPTED THAT TO THE EXTENT THAT HMG ARE IN ANY WAY
RESPONSIBLE FOR ANY SHORTFALL IN THE CAPITAL EXPENDITURE OF POUNDS 17 MILLION OVER THE 5 YEAR PERIOD THAERE SHOULD BE NO
INCREASE IN THE CASH CONTRIBUTION. ON THE OTHER HAND TO THE EXTENT THAT RESPONSIBILITY FOR ANY SHORTFALL COULD BE PLACED AT HONG KONG'S DOOR (EG SEE PARAGRAPH 2 (D) OF YOUR TELEGRAM 110 266) THEN WE WOULD EXPECT THE BALANCE TO BE MADE UP IN CASH, VIREMENT
IN CAPITAL WORKS EXPENDITURE BETWEEN ONE YEAR AND ANOTHER WOULD
REMAIN AN ESSENTIAL FEATURE.
6. WE CONFIRM THAT CONDITIONS IN YOUR PARAGRAPHS 3(A) AND (SUBJECT TO PARAGRAPH 5 ABOVE) ARE ACCEPTED.
7.
PARAGRAPH 7 OF YOUR TELEGRAM NO 528 IS NOTED. IF UNOFFICIAL
MEMBERS QUESTION THE VALIDITY OF THE ARGUMENT REFERRED TO
IN SECOND SENTENCE YOU SHOULD ASK THEM TO GIVE THEIR SPECIFIC
REASONS FOR DOING SO.
(6)
precious
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78.