TNAG-0545-FCO40-640-Strength-of-garrison-in-Hong-Kong-1975 — Page 35

CONFIDENTIAL

5.

All payments by the Hong Kong Government will be made in

Hong Kong dollars. Where these payments relate to components

of cost expressed in sterling in Annex B, the conversion will

be made at the average rate of exchange for the quarter.

Detailed provisions for the calculation and payment of the Hong

Kong Government contribution will be set out in the Statement of

Financial Procedures to be agreed between the two Governments.

6.

The United Kingdom and Hong Kong Governments will from time

to time agree programmes for works services in respect of the

garrison including capital works, maintenance and minor works

(as defined in the Statement of Works Procedures provided for in

paragraph 9). The capital works programme

(1) shall provide adequate facilities for the

garrison;

(2) shall facilitate the release of land surplus

to the requirements of the garrison;

(3)

may include purchases of buildings for the

garrison.

The Hong Kong Government will undertake and, in the first instance,

meet the expenditure under the programmes which will be carried

out to normal United Kingdom standards and scales for Hong Kong.

Total expenditure under the programmes shall not exceed HK$413M

adjusted in accordance with Annex B. The expenditure shall be

spread as nearly as practicable to the annual average.

The Hong

Kong Government contribution will be 50% of the annual expenditure

under the programmes from 1st April 1976 to 31st March 1977,

62.5% of such expenditure from 1st April 1977 to 31st March 1978,

and 75% of such expenditure thereafter and the remaining amounts

of such expenditure will be set off against the quarterly payments

provided for in paragraph 4.

3

CONFIDENTIAL