SECRET
FOR THE STATEMENTS OF FINANCIAL AND WORKS PROCEDURES TO BE COMPLETED BEFORE THE AGREEMENT IS FINALISED. SUB-PARAGRAPH (E) OF THE ANNEX TO THE HEADS OF AGREEMENT CLEARLY IMPLIES THE REVERSE. WE WOULD CERTAINLY NOT DISSENT IF YOU NOW FEEL THAT COMPLETION OF THESE STATEMENTS CAN BE LEFT UNTIL AFTER FINAL AGREEMENT IS REACHED BUT WE WOULD BE GRATEFUL FOR EARLY CONFIRMATION.
5. IT MIGHT BE HELPFUL TO SUMMARISE THE POSITION AS WE NOW SEE IT, IN RELATION TO THE WORK TO BE COMPLETED BEFORE THE AGREEMENT IS
ANNOUNCED.
(A) THE JOINT WORKING PARTY REPORT ON THE RELEASE OF VICTORIA BARRACKS AND RAF KAI TAK IS ENCOURAGING. IT IS BEING STUDIED HERE AND WE SHALL BE READY TO TAKE FINAL DECISIONS WHEN THE GOVERNOR CALLS
ON MR ROGERS.
(B) WE SHALL SIMILARLY BE READY TO MAKE PROPOSALS ON THE DURATION OF AGREEMENT.
(C) OF THE WORK REQUIRED BY THE ANNEX TO THE HEADS OF AGREEMENT AND IN CONNECTION WITH THE MOU:
(1) WE AWAIT YOUR PROPOSED AMENDMENTS TO THE MOU ON WORKS SERVICES:
11) THE WORK ON POSSIBLE ECONOMIES IS COMPLETE, BUT WE HAVE TO DECIDE ON YOUR PROPOSALS AT PARAGRAPH 5(B) OF YOUR TELNO 1178 OF 24 NOVEMBER:
(111) ON DIFFERENTIAL INFLATION WE AWAIT YOUR ACCEPTANCE OF OUR FORMULA ON EQUIPMENT AND YOU AWAIT OUR FURTHER VIEWS ON YOUR PROPOSALS ON LOA/FSA.
(IV) THE PREPARATION OF A SCHEDULE OF LAND RELEASES (ANNEX C TO THE MOU) IS BEING HANDLED IN HONG KONG.
(V) THE REST OF MOU IS COMPLETE EXCEPT FOR THE TEXT ON DURATION: (VI) YOU WILL CONFIRM WHETHER THE STATEMENTS OF WORKS AND FINANCIAL PROCEDURES CAN BE COMPLETED AFTER THE AGREEMENT IS
ANNOUNCED.
6. PLEASE TELEGRAPH YOUR PROPOSED AMENDMENTS ON WORKS, YOUR REACTIONS TO OUR DIFFERENTIAL INFLATION PROPOSALS ON EQUIPMENT, AND ANNEX C TO THE MOU AS EARLY AS POSSIBLE SO THAT WE CAN CONSIDER THEM BEFORE 3 DECEMBER.
CALLAGHAN
FILES
HKIOD (3)
DEF DEPT
SWPD
PS
PS/LORD GORONWY-ROBERTS MR MALE
MR THOMSON
COPIES TO:
MR ANDREW AUS MOD MR WEIR DS6 MOD
MR JE HANSFORD TREASURY MR BRYERS CABINET OFFICE MR P C AGGLETON PSA DOE
SECRET
Page 105Page 106