TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 178

CONFIDILAL

PS/MINISTER OF STATE

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Ha, of we (Am)

Copies to: Mr. O'Keeffe (FCO)*

DS6 (Mr. Ward)

D81 Mr. Tones)

Referanco....

AUS(GS) 519/75

Without enclosures

HONG KONG DEFENCE COSTS AGREEMENT

454A

At a further meeting with Hong Kong officials this morning the Statement on Works Procedures was agreed, subject to confirm- ation of two small points by the Hong Kong side with their works experts in Hong Kong.

2.

Mr. Davies told me this afternoon that the Executive Council considered the texts of the Memorandum of Understanding and the proposed Press statement at their meeting yesterday and raised a number of points.

3.

4.

are:

As regards the MOU (Flag A) the roints are:

(a) Preamble, line 8. The Unofficials would like to alter

"can" to "will". This would strengthen HMG's commitment; but as it is qualified by "should circumstances so require" I believe it is acceptable. In the event of an emergency: whether or not we sent reinforcements would depend on our assessment of the situation at the time rather than the wording of the MOU.

(b) Paragraph 2, last line. The Unofficials want clarification or whether, if HMG defaulted on the release of lanü at Kai Tak for example, and some of the contribution at the higher level had already been paid, there would be a refund. I have agreed with Hong Kong officials the following interpretation, which I think is as satisfactory as we could expect from HMG's point of view. (This would not require amendment of the MOU):

....if, when the contribution for the quarter cnding 31 March 1978 is calculated, it is clear that Kai Tuk will not be released by 31 March 1978 in circumstances which are the responsibility of the UK Government, then the contribution for the first quarter of 1978 will be at 50% and will remain as such until the land is released. There will be no refund."

I see

(c) Paragraph 3. The Unofficials want to insert a specific

reference to the starting date of 1st April 1976. no objection to this and suggest that it might be done by amending the paragraph to read "This agreement will run from 1st April 1976 for a period of 7 years in the first instance

As regards the Press statement (Flag B) the proposed changes

(a) Paragraph 2, 4th line. Delete "can" and substitute "will". I have said that this is not acceptable in a document of this sort without the qualifying language of the MOU. Hong Kong officials accept this.

CONFIDENTIAL

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