TNAG-0441-FCO40-506-Visits-of-leading-personalities-of-Hong-Kong-to-UK-1974 — Page 65

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HONG KONG DEFENCE CONTRIBUTION

Traditionally Hong Kong has made a contribution to HMG towards the

cost of its defence and of the assistance which Her Majesty's

Forces provide for internal security. Following prolonged

negotiations with the Hong Kong Government, the settlement described

below was reached in October 1971. The Ministry of Defence accept

that the average of £8 million per annum is the most which could

have been obtained from Hong Kong, although it represented less than

a third of the cost of the garrison at that time. At current prices

estimated annual cost of the garrison for 1973/74 is £34 million and

the average over the next 10 years is assessed at £36 million in

functional cost terms).

The present contribution:

£40 million spread over 5 years, starting

1 April 1971, made up as follows:

Cash contribution

Capital works

Maintenance and minor works

£12 million (at £2.4 million

per year)

£17 million (£2.9 million

for the first and second

years, £3.4 million for the

third and £3.9 million for

the fourth and fifth years).

£11 million (2.2 million per

year)

The figure of £11 million is a nominal one, the Hong Kong Government

doing all minor works and maintenance regardless of the actual cost.

Any underspending by the Hong Kong Government on the capital works

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