CONFIDENTIAL
2.
3.
The detailed provisions of the agreement
will be embodied in a Memorandum of Understanding which
will include a formula under which costs will be adjusted in the light of changing price and currency exchange rates during the period of the agreement. There will also be a review clause covering, among other things, material changes in the size and costs of the garrison. Further work which remains to
be done in the preparation of the Memorandum of Understanding and related documents is set out in the
attached Annex.
4.
1
The United Kingdom Government acknowledges the substantial increase in the financial contribution
to be made by the Hong Kong Government, and recognizes the importance attached by that Government to a further release for civil use of land held by the British Forces.
Accordingly, the United Kingdom Government has
undertaken to release land at present occupied by
the RAF at Kai Tak and by the Army at Victoria Barracks. Subject to the re-provisioning by the Hong Kong Government of essential facilities at agreed sites, the
land at Kai Tak will be released during the financial year 1977/78, and the land at Victoria Barracks during
/the
CONFIDENTIAL
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