TNAG-0475-FCO40-540-Contributions-of-Hong-Kong-for-costs-on-maintaining-military-1974 — Page 18

CONFIDENTIAL

DEFENCE COSTS

20/

In answer to general questions concerning a

review of the Defence Costs Agreement we would answer

along the following lines:

2.

"Hong Kong is continuing to make a contribution

in kind and in cash amounting to £40 million for the

5 year period from 1 April 1971.

About 528 million of

this is being spent in Hong Kong on capital works and

maintenance of buildings which will revert to Hong Kong

The work if no longer required by the Armed Forces.

is undertaken by the Public Works Department on behalf of the British Government's Property Services Agency.

3.

"During the period April 1, 1968 to March 31,

1971, the Hong Kong Government's averal annual

contribution towards the recurrent cost of maintaining

H.M. Forcas in Hong Kong was running at the rate of £5 million. We have already used this text in answer to

4.

press questions and this seems to have satisfied the

reporters concerned.

If pressed further on the question

of the contribution towards the Captial Works Progranumo

we would say:

5.

"The contribution towards the Services Captial Works Programma is paid when the bills for work on

projects fall due.

6.

"There is a clause in the Defence Costs Agreement

to the effect that if building costs change substantially from 1971 levels the total amount of contribution towards the Services capital works programe may be adjusted by

agreement on both sides.