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normal consideration of individual elements and to some limit on total annual expenditure. It was agreed that works would continue to be subject to the normal control arrangements however funded.
Lands
16. MOD proposed the following lands provisions:
A decision on whether land is surplus to garrison require- ments should be agreed jointly by MOD and HKG.
a.
b. There should be no obligation on MOD to remove buildings from land surrendered or to reinstate land reverting to HKG.
c.
Land required by HKG for a public purpose should be released subject to reprovision where necessary to the satis- faction of and at no cost to MOD.
d.
Additional land may be required in the future to meet any significant increases in garrison strengths.
e. Land or facilities previously agreed for release may need to be retained by mutual agreement to meet increases in the garrison.
It was agreed that these provisions should be reflected in a new DCA.
Payment arrangements
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17. MOD tabled a paper proposing payment arrangements for a new DCA These involved MOD agreement to leave the HKG contribution in Hong Kong in return for HKG agreement to payment in advance. MOD explained that it was normal practice for payments to be repatriated to the UK to ease the PSBR, and that HKG advance payment would be necessary to offset retention of the contribution in Hong Kong. HKG said they might prefer to leave the present transfer practice unchanged and make payments in the middle of the current quarter. HKG might also wish to pay identified sterling liabilities from their sterling holdings, and wished to consider these points further.
Method of updating
18. MOD tabled a paper proposing a system for updating the costs of the garrison. The costing exercise had confirmed that the present system of applying inflators to the cost of a notional garrison had led to a considerable divergence from actual costs. It was essential for MOD to ensure that the new system avoided a recurrence of this shortcoming and was sufficiently flexible to accommodate variations in the garrison. Subject to these con- straints, MOD were ready to consider any proposals for presentation which might assist HKG. The MOD proposal has been prepared with this aim in mind. The basic elements of the proposal were that a general description of the garrison would be included in the DCA,
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