lie
The major topie of negotiations vos the level of Hong Kong'o fivela).
contribution in the processor cost-sharing agreencut vhich past be agrocd
by ↑ April 1976. BMG's opening position was to demand en inaeddute 727) from
Hong Kong while for their part the Hong Kong Covernment and stated the view
that a 50/50 split was the most they could afford. In intenso negotiations,
which for a time were in the balance, the Hong Kong Government were brought
to agree to a graduated contribution rising from 509 in the first year, to
62.5% in the second and 75% thereafter. An important factor in securing
this substantial increase was an undortaking by 1813 to vacate land ot
with
Kai Tak and Victoria Barracks, Lize> Hong Kong reeting the whole cost of
reprovision of essential facilities at cuiteble sites. Other techuted 2inanci(1
points are now being considered by officials. This agreement is being kept secret
until early December, at the request of the Hong Kong Government who consider
they need time to prepare local opinion for so rapid and substantial on
increase in their defence contribution. In the meantime public statements
have referred caly to the size and cost of the future garrison; Hong Kong's
acceptance of the principle that they must bear a substantially higher chare
潭
of the cost: and to the studies of release of land and financial points that
are now in hand with the aim of making an announcment before the end of the year.
Joint
5. A copy of the Joint statement issued in Hong Kong is at Annex A.
CONFIDENTIAL