TNAG-0808-FCO40-1013-Use-of-Crown-lands-relinquished-by-Ministry-of-Defence-in-Ho-1978 — Page 211

CONFIDENTIAL #

2.

о

becomes due, a calculation will be agreed between the Hong Kong and United Kingdom Governments of the changes necessary to adjust each of the separate components of the cost of the garrison (other than works services) listed in Annex B to the price levels ruling at the beginning of that quarter.

The indices or other measures to be used in calculating these adjustments are set out in Annex B, and the adjustments will be calculated by reference to the movements in the indices or other measures. The instalment to be paid at the end of June 1976 will include the adjust- ments so calculated up to 1st April 1976. Subsequent instalments will include the adjustments in relation to both the quarter of payment and the immediately preceding quarter. After the end of the Agreement, a calcu- lation will be made of any further adjustments needed and a final settlement will take place.

5.

All payments by the Hong Kong Government will be made in Hong Kong dollars. Where these payments relate to a component 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 an agreed Statement of Financial Procedures.

6.

The

The United Kingdom and Hong Kong Governments will from time to time agree programmes for works services in respect of the garrison comprising capital works and maintenance and minor works (as defined in the Statement of Works Procedures provided for in paragraph 9). capital works programme

will facilitate the release of land surplus to the requirements of the garrison; and

(a):

will provide adequate facilities for the garrison;

(b).

(c)

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 will not exceed HK$413 m. adjusted in accordance with Annex B. The expenditure will 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% 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.

By agreement, the Property Services Agency may undertake capital works for the convenience of either the Hong Kong Government or the United Kingdom Government.

1.

/ para. 8..

SNFIDENTIAL