estimate omits credit of about $200 million for land sales on the Wan Chai Reclamation, which was credited by the Planning Committee to the scheme in its preliminary report and was mentioned as such in memorandum XCC(77)82, as the sites considered have already been replanned for sale regardless of which scheme for Victoria Barracks is adopted. The estimated net revenue from the various schemes is summarised below:
6
(a) Victoria Barracks Planning Committee's
Preliminary Report (June 1977)
(b) Victoria Barracks Planning Committee's
Final Report (September 1977)
(c) Public Works Department alternative
proposals (October 1977)
(d) UMELCO proposals, assuming the use
of existing platform areas (March 1978)
$1,250 M
$
448 M
$1, 105 M
$
789 M
Members will note that, because of the probable release of Murray Barracks, which was previously not thought likely to be possible, the revenue potential from the Government's alternative proposals has been significantly increased. The figure of $420 million as a value of the Murray Barracks area may, however, be suspect, as the commercial value of the site may be affected by the elevated roads which would separate the area from the commercial heart of Central.
Relationship between Land Sales and Expenditure under the Defence Costs Agreement
7
The UMELCO representations raise an important question about the relationship between the release of land and revenue therefrom and the Hong Kong financial contribution under the Defence Costs Agreement.
8
At the time of the negotiations preceding the conclusion of the Agreement it was not necessary to reach any definite conclusion regarding the future use to which the land released was to be put and therefore the revenue which might result from any sales. In early November 1975 it had been formally agreed between the Minister of State for Defence and the Governor as follows:
The United Kingdom Government acknowledges the substantial increase in the financial contribution to be made by the Hong Kong Government and recognises the importance attached by that Government to the further release of land held by the British Forces
CONFIDENTIAL