XN000022-1975-12-19 — Page 11

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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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