CUNE LUENTIAL
years, the balance being found by the United Kingdom Government. The Agreement
which contains arrangements for reflecting changes in price levels and currency
exchange rates, will run for 7 years initially and will be renewed on the
same terms for subsequent periods of 5 years unless either Government gives
notice of an intention to vary the terms
3. In addition to dealing with the size and cost of the garrison, the Agreement
provides for the release for civil use of land no longer required by the
British Services. In consideration of the substantial increase in Hong Korg's
financial contribution, the United Kingdom Government has also undertaken to
release land currently occupied by the Services at Victoria Barracks and at RAF
Kai Tak. This land, which is owned by the Hong Kong Government, will be
released during the financial years 1977/78 and 1978/79, the necessary Service
facilities being reprovided elsewhere by the Hong Kong Government.
4. I believe that this Agreement is in the interest of both Governments.
the United Kingdom it will provide a valuable contribution to the defence
budget and for Hong Kong the assurance of a continued British garrison. I
hope that it will be welcomed by the House.
CONFIDENTIAL