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in price levels. The greater part of the cost is incurred in Hong Kong and is thereby subject to price movements in Hong Kong rather than in the United Kingdom. The agreement makes provision for reviews of any aspect of the costs or composition of the garrison including the costs of the support elements, with any savings being shared in the same proportion as the contributions.
Her Majesty's Government has undertaken to release land currently occupied by the Services at Kai Tak (about 120 acres) and at Victoria Barracks (43 acres) in the years in which the Hong Kong contribution increases to 62% and 75% (1977/78 and 1978/79 respectively) subject to the reprovision elsewhere of essential service facilities by the Hong Kong Government. These two areas are already the property of the Hong Kong Government, which will bear the full cost of reprovisioning. The agreement also makes provision for the release for civil use of other land and buildings no longer required by the British Services.
The new agreement assures Hong Kong of a
continuing British commitment, backed by a British garrison, for which Her Majesty's Government will continue to pay a proportion of the cost. This will ensure that the stability and confidence which are so essential to Hong Kong's
prosperity are maintained in the future.
COMMENT ON THE DEFENCE COSTS AGREEMENT BY
THE ACTING GOVERNOR
The new Defence Costs Agreement has been concluded today between the Governments of Hong Kong and the United Kingdom - after very tough negotiations which have lasted for more than a year.
/Understandably,