TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 71

- 2 -

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

The Agreement makes Kong rather than in the United Kingdom.

4.

with

provision for reviews of any aspect of the costs or composition of the garrison including the costs of the support elements, any savings being shared in the same proportion as the contributions.

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 62% 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 civil use of other land and

buildings no longer required by the British Services.

5.

elsewhere.

The Hong Kong Government is satisfied that this Agreement

The Agreement is a fair one and in the interests of Hong Kong.

accords with the current view of Hong Kong's ability to pay a larger contribution towards the garrison than in the past though this will still be less than that borne by comparable communities

The new Agreement assures Hong Kong of a continuing British commitment backed by a British garrison for which HMG

will continue to pay a proportion of the cost. that the occupation and use of land by the Ministry of Defence is brought sharply into line with the realities and the require- .ments of modern Hong Kong. The size to which the garrison is to

be reduced has been based on a careful assessment of current needs,

It also ensures

.../3.