TNAG-0541-FCO40-636-Strength-of-garrison-in-Hong-Kong-1975 — Page 155

GR 575

PRIORITY

CY/HER/CAT A

FM F.C.O. 061715Z

CONFIDENTIAL

CONFIDENTIAL...

RECEIVED IN REGISTRY NO. 50 -9 JUNI935

AKKIO!

TO PRIORITY HONG KONG TELNO. 454 OF 6 JUNE 1975.

FOLLOWING PERSONAL FOR GOVERNOR FROM O'KEEFFE.

REF.

าร

RES

REG

(172 176)

YOUR TELS NOS 544 AND 545 : DEFENCE COSTS AGREEMENT,

171

1. FOLLOWING IS THE DRAFT TEXT OF THE MEMORANDUM OF UNDERSTANDING AS AGREED AT OFFICIAL LEVEL BY THE APPROPRIATE DEPARTMENTS IN WHITEHALL, MINUS, OF COURSE, THE FIGURES OF RELATIVE CONTRIBUTIONS WHICH WILL NEED TO BE SETTLED BY SUBSEQUENT NEGOTIATIONS.

BEGINS:-

1. THIS MEMORANDUM OF UNDERSTANDING EMBODIES ARRANGEMENTS WHICH HAVE

BEEN AGREED TO BY HER MAJESTY'S GOVERNMENT AND THE HONG KONG

GOVERNMENT.

2. DURING THE FINANCIAL YEARS BEGINNING 1976/77 THE HONG KONG

GOVERNMENT WILL MAKE A DEFENCE CONTRIBUTION IN HONG KONG DOLLARS

AS FOLLOWS:

(DETAILS OF THE AMOUNTS AND DURATION TO BE INSERTED)

3. THE AMOUNTS SHOWN ABOVE ARE AT A (SEPTEMBER 1974) PRICE LEVEL AND THEY WILL BE ADJUSTED ANNUALLY TO REFLECT CHANGES IN PRICE LEVELS RULING IN HONG KONG AND THE UNITED KINGDOM AS APPROPRIATE, SO THAT THE ACTUAL PAYMENT EACH YEAR WILL BE MADE AT PRICES

APPROXIMATING TO THE OUTTURN PRICES OF THAT YEAR. THE INDICES TO BE USED IN MAKING THIS ADJUSTMENT ARE SET OUT AT ANNEX AND THE

ADJUSTMENT WILL BE CALCULATED EACH YEAR ON THE BASIS OF THE

MOVEMENT IN THE RELEVANT INDICES FROM END-SEPTEMBER OF THE

PREVIOUS YEAR TO END-SEPTEMBER OF THE CURRENT YEAR. AT THE SAME TIME AS THIS ADJUSTMENT IS CALCULATED, A CALCULATION WILL BE MADE OF THE PROVISION TO BE INCLUDED IN THE ESTIMATES OF THE HONG KONG

GOVERNMENT FOR THE FORTHCOMING YEAR.

CONFIDENTIAL

14. THE