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what has been proposed (as an example, we were asked recently whether we could consider taking on additionally a 7-year programme for the construction of up to 900 quarters). And so on I am merely attempting to give a general picture of our many difficulties over the figures.
3. My present feeling therefore is that our attempts to reconcile what we might be able to provide with a figure based on calculations related to HMG's costs and needs is a rather hopeless quest: and that the time may have come to cut the Gordian knot of it and suggest a figure which I may and I repeat may be able to put over locally, without regard to any other considerations. Thinking this over, and giving you the top figure I might be able to justify by arguments sufficiently persuasive locally to give me some hope of gaining acceptance for them, I suggest a figure of £8 million per annum for the period of a 5-year agreement: of which £2 million per annum would be ear-marked for non-recurrent capital works, these works to remain the property of the Hong Kong Government, and to be selected from works which are agreed by this Government to be of potential value to Hong Kong if no longer needed for use by the Services.
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4. I would suggest that the arrangement should be considered to be a basically stable one running for 5 years, and subject to review only if the garrison is increased or decreased by the equivalent of 2 (or more) major Army units.
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The figure of £2 million p.a. for capital expenditure could on further consideration be varied, I suggest, within the total of £8 million if so high a figure causes difficulties at your end.
6.I would point out that this proposal
represents a 60% increase in the contribution, which
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