TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 56

CONFIDENTIAL

CONFIDENTIAL UNTIL RELEASED

3.

An important feature of the new Agreement, which was not

included in earlier agreements, is that Hong Kong's payments

to the United Kingdom will be adjusted for changes in price

levels. The greater part of the cost is incurred in

Hong Kong and is thereby subject to price movements in

Hong Kong rather than in the United Kingdom. The Agreement

makes provision for reviews of any aspect of the costs or

composition of the garrison, including the cost of the

support elements, with any savings being shared in the

same proportion as the contributions.

4. HMG has undertaken to release land currently occupied by

the Services at Kai Tak (about 120 acres) and at Victoria

Barracks (43 acres) in the years in which the Hong Kong

contribution increases to 621% and 75% (1977/78 and 1978/79

respectively), subject to the reprovision elsewhere of

essential Service facilities by the Hong Kong Government.

These two areas are already the property of the Hong Kong

Government, which will bear the full cost of reprovisioning.

The Agreement also makes provision for the release for civii

use of other land and buildings no longer required by the

British Services.

? Saving

п

5. HMG is satisfied that this Agreement is a fair one and

in the interests of both. Governments. Hong Kong will have

the assurance of a continued British garrison; and for HMG

the Agreement will provide a valuable contribution to the

Defence Budget.

Ministry of Defence, London

19 December 1975

CONE!

CONFIDENTIAL UNTIL RELEASED