TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 53

8. Financial Secretary Sir John Cownerthwaite with RD. A cuite long and amiable discussion about the works aspects of the new defence agreement and in particular the .proposals about works contained in recent exchanges with London. I led into the

subject by saying that the views that came from London largely represented our (DOE) views. I reminded him that the two proposals for a contribution in kind viz mainten- ance and minor works, and later capital works, had come from the Governor and appreciating the Governor had some good reasons for them we had concurred though in doing so we had unavoidably had some reservations because we could see that there might be arguments about standards of maintenance, the need for minor works and who pays for some capital works or parts (eg air conditioning) of them etc. I said that however the contribution might be expressed publicly it would nevertheless be only a proportion of the total cost of the Force and therefore there is no point in having demarcation arguments effectia second time about what Hong Kong should or should not way for; though recognising that for"residual rights" purposes it would be necessary to record in some way what capital works Hong Kong had paid for. Discussion ranged round these points and it was difficult to tell what impression was left with Sir John though he did say that provided capital works were in kind, maintenance could perhaps come out of the cash contribution. We did not pursue this point as it seemed questionable whether what would be gained by our having absolute control over all minor works and maintenance as compared with the extra cost to G if works costs continued to rise.

From what I learned later from the Director, PD about likely trends in works costs I am inclined to think that we should if given the option take the cash (of Am2.2) and pay for all minor works and maintenance ourselves. At the close of discursions on this point I expressed the strong hope that as soon as the Governor had ecided how he wished to play the works aspects of the contribution it would be possible to have discussions about how to manage works matters before the thing gets crystallised in print and people are faced with having to interpret forms of words which may have been used by the Governor in the first instance only for presentational reasons. Cir John said he would bear the point in mind.

9.

Director of Public Works, Mr J J Robson with RD. Several points were discussed:-

(a) At the outset I assured Mr Robson that it is our intention to ro on using the PD as our agent on the same general basis as under the present arrecment ie they normally do our work unless they cannot do it or we have some special reason for doing it ourselves. He said this is well understood.

(b) I said that I hoped that whatever the shape of the new arreement might prove to be we could contrive to avoid demarcation arguments about who pays for what, etc. His agreement to this approach was so wholehearted that I was left with the impression that the difficulties we have had in the past were not of PWD making.

(c) We gave Mr Robson our up-to-date programme of proposed works exnend- iture for the next five years (see para 10 below) subject to the usual provisos and the extra proviso about the JSP quarters programme.

(a) Mr Soper mentioned that it sometimes happens that when a project is running late PD are slow to admit that completion will not be on time.

This can cause us embarrassment with the Services who need reasonably early warning if completion will not be on time. Ir Robson promised to look into this.

(e) As regards rising building costs Mr Robson rave as his view that the rate of increase is now beginning to slacken and would level off in about nine months to a year.

Whether thereafter there could be a drop would depend on any weakening in confidence in the prosperity of the colony.

(f) Mr Robson asked whether DO might be able to help PD in arranging in UK for some terminal training of their CS staff before they take their final exam- inations. I said it seemed an interesting idea and Mr Robson agreed to set out the request fully in a letter to Mr Soper who will send it on to us.

CONPID

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