TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 109

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Your Ref:

Our Ref:

HKK 10/9 DSO 1112/30

MINISTRY OF

Copy No 1

PUBLIC BUILDING AND WORKS

LAMBETH BRIDGE HOUSE, LONDON S. E.1

Telephone: RELiance 7611

10th November, 1970.

of 4.

Mr Gammern

cc Mr Wilful

77

myr hourd o.../

20

68

They went Sharply Down

Dear homson

Thank you for your letter of 3rd November sending a copy of the letter of 19th October from the Governor, Hong Kong.

In paragraph 2 of his letter the Governor has clarified, to some extent at least, the two works points we have been concerned about.

Virement by mutual consent between the capital and recurrent elements (para 2(a)) seems fine. I hope I am right in thinking that this means that the Governor's original proviso about selection of works of potential value to Hong Kong is of no financial significance to the total amount of the contribution paid by Hong Kong.

As regards minor works and maintenance (para 2(b)) the current agreement specifies a notional amount (£475,000) forming part of the £5m contribution in respect of the IS garrison but the PWD meets an annually, calculated IS proportion of the actual cost of all minor works and maintenance. I read paragraph 10(c) of the Governor's letter to mean that he wishes to avoid this IS assessment in the future agreement, but it is important to know what other form of assessment he proposes whether a fixed annual sum or a fixed proportion of the total annual cost. According to paragraph 5 a figure at current cost levels has been included and I should like to know what this is. I should also like to know in what way the PWD is not entirely happy with the current arrangements, at least insofar as this may affect the main provisions of the agreement. We shall no doubt have to negotiate the works agreement but it makes a difference if changes are likely to be of substance rather than detail.

a four years ago.

MAT

G

I am puzzled by the reference to capital works in paragraph 5. As far as I am aware we have not yet supplied the Governor with any revised scale of works required and I should therefore like to know what assumptions he is making about it and the effect they have had in causing him to reduce his offer. I do not understand either why there has been no adjustment to take into account the present level of costs; rises in building costs in Hong Kong appear to be steep and continuous.

I am sending copies of this letter to Gwynn and Gedling.

Sir Leslie Monson KCMG, CB, Foreign & Commonwealth Office, LONDON, S.W.1.

Jour sciench

bie Stroke.

(E. H. A. STRETTON)

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