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CK EYES A
present to the "reduced" garrison.
Costs arising on this account outside
the £41M average figure amount to about £2.7M, in 1976/77, comprising the
gross extra costs of retaining a second infantry battalion until accommoda-
tion for the fourth Gurkha battalion can be provided in Hong Kong (and for
the UK battalion itself in the UK) and the extra cost of the present over
the proposed new command structure, which cannot be fully introduced until
trained Gurkha signallers are available in early 1977. Costs of works
services required to accommodate to scale the different mix and deployment of
the reduced garrison and included within the £41M average figure amount to
some £8.5M in gross terms but were not referred to specifically by the Hong
Kong representatives. Another point not raised during the discussions was
the value to Hong Kong of land released by the concentration of the "reduced"
garrison in a smaller number of sites.
The Hong Kong contribution
13. The Hong Kong representatives were not authorised to discuss either the
size of the Hong Kong contribution or the possibility, referred to during the
meeting between the Governor and DUS(P) in London on 18 December, of
reducing the burden of the increased contribution on the Hong Kong economy in
the early years of the new Agreement by graduating the annual payments so as
to give an average contribution of 75% over a period.
Inflation
14.
Broad agreement was reached on a mechanism of calculating the additions
to be made to the Hong Kong contribution on account of inflation (see
paragraph 7(c)). Annex G sets out the proposed arrangements.
B. OTHER DISCUSSIONS
15. The discussions in formal session may be held to have achieved the first
of the two main objectives of the visit (paragraph 1), namely the provision
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