COF
equal to the agreed percentage of the total garrison
The former system incorporated in your draft
would not appear to be consistent with this basic
feature of the agreement. Until there is agreement on the approach, it is scarcely possible to
propose a framework for your discussions with
UMELCO.
3. For these reasons we have proposed tackling the problem as in our telno. 524. It is perhaps also worth noting at this stage, however, that
there appears to be some misunderstanding over
the revaluation procedures which we have in mind. If the contribution is to represent the agreed proportion of garrison cost, then each year's contribution must be related (approximately)
to the outturn prices of that year as reflected
in the movement of the chosen indices. This
requires that each year's contribution is revalued
during the course of the year in which it is
made.
Para 3 of our draft Memorandum of Under-
standing allows for this whereas yours does not.
4. We have no strong views on timing of officials' meeting in London but assume that it would be most convenient after the holiday period, perhaps towards the end of September.
CONFIDENTIAL
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