NOTHING TO BE WRITTEN IN THIS MARGIN
W(B)L 51-7406
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would help you in presenting the terms
to your Executive Council there would be
no objection (subject to paragraph 5
below) to increasing the capital element
to £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 £8 million over
(You are doubtless
the five year period.
aware of fact that included in capital
element of £17 million is some £1.3
million worth of work being executed
direct by Department of Environment,
5.
.)
However, in accepting this HMG would
need some modification of the condition
suggested in paragraph 3(B) of your
telegram No 528. It is accepted that to
the extent that HMG are in any way
responsible for any shortfall in the
On
capital expenditure of £17 million over
the 5 year period there should be no
increase in the cash contribution.
the other hand to the extent that
responsibility for any shortfall could
be placed at Hong Kong's door (eg see paragraph 2(B) of your telegram No 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
paragraph 3(A) and (B) (subject to
paragraph 5 above) are accepted.
3.
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17.