TNAG-0475-FCO40-540-Contributions-of-Hong-Kong-for-costs-on-maintaining-military-1974 — Page 6

CONFIDENTIAL Covering Secret

35

Mr Pellow (Defence Department W 654)

1.

2.

Westbrook's minute of 5 July below.

I attach a copy of the Memorandum of Understandin between G and the Hong Kong Government which sets out the arrangements for Hong Kong's defence contributions for the five financial years 1971/72 to 1975/76.

3. Following recent discussions Hong Kong have agreed to pay an additional HK $35 million (42.85 .million) to be spent during the remaining two years of the Agreement. This was negotiated under Section 3 (1) (a) of the Agreement whereby the Hong long contribution is subject to review at any time if the costs of capital works have risen by over fifty per cent from the April 1971 price level. The fact that negotiations were taking place was not made public and as Hong Kong is anxious that their decision to make an additional contribution should remain confidential this information should be treated accordingly.

11 July 1974

A L Wotton

Hong Kong and Indian Ocean Dept K 245

MA 668

:

COMP IZIIInd Covering Secret