TNAG-0310-FCO40-346-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 190

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W(B)L 51-7406

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would help you in presenting the terms

to your Executive Council there would be

no objection (subject to paragraph 5

below) to increasing the capital element

to £17 million and reducing the recurrent

cash element of the contribution as

indicated in paragraph 2 of your telegram

No 528 provided that the total annual

contribution remained at £8 million over

(You are doubtless

the five year period.

aware of fact that included in capital

element of £17 million is some £1.3

million worth of work being executed

direct by Department of Environment,

5.

.)

However, in accepting this HMG would

need some modification of the condition

suggested in paragraph 3(B) of your

telegram No 528. It is accepted that to

the extent that HMG are in any way

responsible for any shortfall in the

On

capital expenditure of £17 million over

the 5 year period there should be no

increase in the cash contribution.

the other hand to the extent that

responsibility for any shortfall could

be placed at Hong Kong's door (eg see paragraph 2(B) of your telegram No 266)

then we would expect the balance to be

made up in cash. Virement in capital

works expenditure between one year and

another would remain an essential feature.

6. We confirm that conditions in your

paragraph 3(A) and (B) (subject to

paragraph 5 above) are accepted.

3.

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17.