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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 the five year period. ( You are
doubtless 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
are to the extent that HMG is in any way responsible for
any shortfall in the capital expenditure of £17 million
over the five year period there 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 (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 above) are accepted.
Paragraph 7 of your telegram No 528 is noted.
7.
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.
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