TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 69

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MEMORANDUM OF UNDERSTANDING

ANNEX

This Memorandum of Understanding embodies the arrangements to which a majority of the Unofficial Members of the Executive and Legislative Councils have informally agreed with the concurrence of the Governor.

2.

(a)

In recognition of the United Kingdom's balance of payments difficulties, it was agreed that, for the four financial years commencing with 1967/68, Hong Kong would make an annual defence contribution of £1,500,000 plus a special additional contribution of £3,500,000 per annum. This sum of £5,000,000 will be applied each year as follows:-

for the maintenance of military buildings and installations required for a force' of four major units plus their support, together with such necessary minor works as are agreed: this maintenance to be carried out by (and at the expense of) the Hong Kong Government: and to be notionally valued at

£475,000 per annum;

3.

(b)

(c)

as to £3,925,000 per annum, towards the recurrent costs of this force;

as to £600,000 per annum towards a programme of capital works required for this force, to be agreed with the Hong Kong Government. This will include the final instalment of £250,000 on the naval dockyard, and the balance- unpaid by 31/3/67 against contracts already let in respect of the Whitfield scheme, and the £6,000,000 special building programme;

(d) in any one year, virement between (b) and

(c) above may be made with the agreement of H.M.G. and the Government of Hong Kong.

Depending on the final decision as to the total size of the garrison in Hong Kong, the Ministry of Defence will undertake to use their best endeavours to release to the Hong Kong Government, on request and under the new arrangements which have been separately agreed, any military lands not required for the immediate use of the garrison. Any lands that may need to be reserved for possible reinforcement purposes will be in localities to be agreed with the Hong Kong Government.

4.

Should circumstances arise which would affect

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