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that this figure would be inadequate and £3.5M is now stated by PSA as required in 1976/77 (ir. compensation with the cutback in 75/76) reducing to £3M per annum thereafter. This will have the effect of increasing the annual cost of the present force package by at least £1M. HKLF in making the original estimate, may have overlooked the agency fee levied by the Hong Kong authorities for the services they provide and the fact that it might not be possible to reduce the estate pari passu with the reduction in force levels.
Operation of Proposed Agreement
12. There are indications that the Hong Kong authorities are every bit as concerned as before to maintain the presentationsl benefits of the works content of whatever contribution they agree to make. They have displayed a desire to establish as part of the negotiation itself machinery to agree a works programme and to ensure that it does not fall below a specified minimum level.
13. The draft Memorandum of Understanding provides for then to carry out the works programme and abate the cost from their cortribution, the balance of which will fall to be paid in cash. The M of U indicates that maintenance is to be to standards specified by the UK authorities, but as regards capital works the draft provides for the UK and Hong Kong Governments to agree a programme "to provide adequate facilities for the garrison and to facilitate the release of land surplus to the requirements of the garrison". It would appear that the Hong Kong authorities may be taking the reference to an agreed programme (and the fact that they are expected to contribute at least 50% of its cost) to mean that they are now co-determinants of the programme content in a way they have never claimed during the running time of the present Agreement.
14. Given an equal voice ir deterrining programme content, the
Hong Kong authorities would be most interested in pain those retaining
projects which were directed to releasing land, whereas we would perforce have to give pride of place to providing facilities for the garrison. It so happens that some of the projects currently envisaged secure both objectives, but this is fortuitous and may not hold good in all circumstances.
15.
In response to feelers from the Governor and from CBF aimed at securing as part and parcel of the forthcoming negotiations, the establishment of local machinery to control the works programme, we have taken the line that:-
16.
a.
the business of establishing procedures to control the works programme should not hedevil negotiation of the Agreement itself, but should form a separate and subsequent process
b. complete delegation of programme content to a Command is not consistent with MOD's and PSA's financial responsibilities
It is suggested that in the forthcoming negotiations the Minister might.-
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