XN000022-1975-12-19 — Page 19

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NEW DEFENCE COSTS AGREEMENT CONCLUDED

Under the defence agreement signed in London today,

Hong Kong's contribution to the total annual cost of the garrison will be based on a sliding scale beginning at 50% and reaching 75%

in the third year.

The total annual cost of the garrison, at September 1975

prices, is $450 million. In the first year of the new agreement

April 1, 1976 to March 31, 1977 Hong Kong's contribution will be

This will rise to $281 million in the second year

$225 million.

April 1, 1977 to March 31, 1978

1978 onwards.

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and to $337 million from April 1,

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Announcing this tonight, a Government spokesman said that the

Hong Kong Government is satisfied that the agreement is a fair one and in the interest of Hong Kong. It will run for e period of seven years in the

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first instance. It will be renewed on the same terns for further poriods of five years unless either government gives notice, a year before the end

of any such period, that it wishes to vary the terms.

The agreement contains a clause which allows either government

to seek information, at any time, relating to any part of the garrison's

cost with a view to making further savings.

Any economies that are found in this way will be shared in the

same proportions as the contributions to the cost of the garrison,

the spokesman said.

Provision is made for the cost of the garrison to be varied

by changes in price levels in Hong Kong and the United Kingdom, The

revised cost will be shared by both governments in the appropriate

These changes will be determined in respect of each

proportions,

component part of the garrison's cost.

/Giving