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An important feature of the new agreement which was not included
in earlier agreements, is that Hong Kong's payments to the United Kingdom
will be adjusted for changes 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.
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