My para
6.
Though' thek.
quing
6.
In view of this there would seem to be no technical reason
against a review now, under the cost escalation clause, and some
harm in delay.
We
Furthermore, the tenor of your informal discussions
with QMG leads us to believe that you support this reasoning but
we should be glad to have your confirmation pf, this.
7.
You
1) versed for
On the assumption that discussions go ahead the next question
is how we settle on a figure or formula, bearing in mind the various
options already considered as well as other possibilities such as
linking expenditure to price indices. PSA estimate that to carry
out the existing programme an extra HK$80M will be needed by
31 March 1976 assuming that inflation continues at its recent rate
whereas we understand that about HK$30M was regarded as a minimum
contribution which Hong Kong might be prepared to consider. It was
recognised that other formulae were open to argument. There is
a good deal of complexity in the arithmetic and logic of these
various approaches and if you are agreeable we would be happy for
representatives of MOD and PSA who will be visiting Hong Kong on
2nd May under arrangements already made between QMG and CBF to review
the capital works programme, to enter into discussions with members
of the Hong Kong Government with the aim of reaching a provisional
agreement which would be subject to ratification between us.
8.
Incidentally, on looking through the files it appears that no
final copy of the Memorandum of Understanding was sent to you. I attach one now, with apologies for the omission. A copy in draft was originally sent to Hugh Norman Walker on 11 November 1971 (our reference HKK 10/9) by Michael Laird. Peter Lloyd accepted it on behalf of your Government in his letter to Gaminera of 3 February 1972 (your reference SCR 20/1486/70 II).
3