TNAG-0310-FCO40-346-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 35

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South China Morning Post

7 Oct. 4

Governor saves $280m in defence costs

Hongkong's contribution towards the upkeep of the British garrison has been scaled down from £60 million (HK$840 million) initially requested by the United Kingdom Government to £40 million ($560 million).

The new figure was agreed on after strong representations to Whitehall by the Governor, Sir David Trench, who said £60 million was out of the question and quite unreasonable.

The 1'40 million contribution, which was given fill support by The Unofficial Members of the Legislative Council, will be paid over the next five years at a rate of £8 million ($112 million) a yaar.

The actual cash contribution to be paid will be 347 mullion **168 million), which represents Funder one tenth of the overall Zestimated cost of almost £140 nullion ($1,960 million) which | the Hongkong Government will Apay to maintain the paríkon in

The period.

over

The remainder of the new apreement is made up by two contributions in kind. The first of these is n sum of 4 17 multion ($2.38 million) which will be sepnt or major works and will

TO eventually revert the Hongkong Government in the form of capital assets.

The remaining £11 million ($154 million) is the estimated cost of maintaining armed services buildings and the provision of mmor capital works.

Announcing the new agreement in the Legislative Council yesterday, the Financial Secretary, Mr C. P. Haddon-Cave said: "There is in our view only one line of argument, which can be said to justify the making of any defence contribution. This is that since the presence of the garrison contributes

very materially to the stability and prosperity of Hongkong. Hongkong should make some contribution towards the 28 million inclusive of Papital expendittire witch it cunts UK taxpayers ammially to support the garrison here,"

Mr Haddon Cave said, it had been estimated that the direct

economic benefit to Hongkong of having the services stationed here was about A'M million # yent.

"This in a senso makes thu Agreement neutral in its ellect Kince the defence contribution. will be offset by the value to the

Release

PH

IMG.

of land

The Armed Services are likely to release Government some 320 neres of land "in due course," Me the Enddon Cave Council,

He said it was very difficult to estimate how much this land at Lyemum in the New Territories And along Chatham Road and Argyle Street might be worth in either financial or social terms, but it would represent a considerable offset #galust what Hongkong would be paying out.

He noted that as a result of the 1966 negotiations, the Services relcased 160 acres of land to the value of £15 million.

"And this figure of £15 million is to be compared with the £20 million we paid over the four years of the previous period,” he added.

Hongkong Government of the military presence in the Colony and surely we ought not to expect to make a puulii, 30% DE were, from living agentthesis.'

Two Unofficial members, M P. C. Woo' and Mr H. J. C. Browne, both spoke in support of the new agreement and said

the proposed contribution was fair in all circumstances,

Comparing the new defence contribution with the 1960 contribution, ** Government spokesman saiet:

"In 1966 the total cost to Her Majesty's Government of maintaining the parrbung Hongkong was estimuted about #17 million

# year compared to the present estimiste of £28 million a yenɛ.

W

"Under the old agreement Hongkong agreed to pay #20 million Over the four yea period with 75 per com of this total made up by the Bakh contribution.

"by the new apreement the ensh contribution of 4' 1 2 million represents only 30 per cent of the total defence contribution."

Percentage

revenne

In his speech, the Financial Secretary said the percentage of Hongkong's annual spent On the defence contribution had dropped slightly since 1966. Under the old agreement 3.9 per cent of the annual revenue was spent on the defence contribution and under the new arrangement the figure is 3.7 per cent.

ar-

Describing the negotiations leading to the defence contri- bution agreement as "difficult and complex,

Mr Haddon- Cave said the present rangements had been reached only "after much anxious consideration in Landom.”

The abu silosed that the Cloverno had been personly with thene concerned negotiations and, in response to

(Contd on Back Page, col 6)

Defence

costs

(Contd from Page 1)

Britain's request for £60 million, had "quickly pointed out that a contribution of this magnitude was quite out of the question and quite inrensonable particularly in relation to the very heavy calls which Hongkong will have on its resources over the next few years."

Mr Woo, speaking in support of the contribution, said the amount which was now to be paid was offered freely.

Valuable

"There can be no question that the presence of the troops here does make a valuable contribution to the stability and · internal security of the Colony. The Unofficial Members accept that for this reason we should pay a share."

Mr Woo drew attention to the fact that the contribution in cash will be £2.4 million a year, compared with the previous cash payment of £3.9 million a year.

Mr Browne said it was satisfying to hear that the Government would be prepared to reconsider the contribution from Hongkong if the Colony got into economic difficulties in the next five years.

He hoped Government! would be able to announce within *ix months the programme for the release of land by the services. particularly that along Chatham Road and Argyle Street.

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