LOOSE MINUTE
REFERENCE: DDAQ/10/50
CONFIDENTIAL
Da.
du. Jaurric
81016
(297
297)
fr
alex
Head of DS 6
Copy to: AUS (GS) D of DP (C)
Head of F1 (Air) Head of DS 23 DS1 (Mr Jones) MO 2
ASD 2
PSA: Mr P Aggleto 1 Treasury: Mr Hansford
FCO (HKLOD)
HONG KONG:
BRIEFING FOR MINISTER OF STATE(Rogers)
Reference A: D/DS 6/46/66/1 of 17 September D/DS 6/46/66/1 of 10 September
1.
B:
The following paragraphs provide the basis for a works input to the Minister of State's brief for the forthcoming negotiations along the lines prescribed in Ref A. They should be related to whatever is to be said in the brief about defence land holdings in Hong Kong regarding which we have been in touch with DS 23, as requested by Ref B.
Provisions of Present Agreement
2. The agreement concluded for the period 1971 - 1976 was largely works-orientated. This was very much on the advice of the then Governor who considered that the Hong Kong Government would find a contribution geared to real estate (in which they thereby acquired a reversionary interest) easier to justify than a straight cash contribution.
3. Thus out of the contribution of £40M (specified in Sterling) originally envisaged for the 5-year agreement period:-
a, £17M related to capital works (or cash in lieu provided that failure to meet this level of expenditure could be laid at the door of the Hong Kong Government)
b.
full maintenance of existing real estate. This activity contributed in kind was valued at £11M (nominally £2.2M per annum)
These provisions were subject to review if costs rose by 50% in the running time of the Agreement.
4.
Implementation of Fresent Agreement
5.
Once we had acceded to a substantial part of the present contribution being tied up in capital works, it was necessary to ensure that a programme (which would not have been carried out until later had it had to be Sterling funded) was accelerated in order to make full use of this resource.
CONFIDENTIAL
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