4.
SEGRET
value to Hong Kong if no longer needed for use by the
Our understanding of this is that within
Services.
an annual contribution of £8M, there would be a varying
amount up to £2M year by year for capital works of that
description. Depending on what was regarded as of
potential value to the Colony, it would seem that the
amount could be appreciably short of £2M in some years,
(but this is presumably realised and would not affect
the overall amount of the contribution,
intention?
Minor Works and Maintenance
Is this your
The existing arrangement whereby the Colony pays a
share (about £0.475M per annum) of the cost of minor
works and maintenance carried out on behalf of the
Services by PWD has worked satisfactorily, and is a
system which we should all presumably be happy to
>
continue. Is this your intention, (and will the Colony's
share fall outside the defence contribution?
A difficulty about a fixed annual contribution for 5 years
is that its value would inevitably decrease in real terms over the
period. That is an objection to the present agreement. It would
be more acceptable here if we could at any rate have a provision
for annual adjustments to cover pay and price increases so as to
maintain the real value of the contribution. An alternative which
we should be very willing to look at would be a proposal by whi ch
the contribution increased by a pre-determined amount each year.
(In
such an arrangement the rise in price levels would be simply one
justification of a rising rate of contribution, the main purpose of
which would be to stage the process by which the Colony assumed a
more realistic share of the cost of its internal security measures
/5.
sures.)
SECRET
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