TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 164

or taking such steps as are necessary and practicable to ensure that the

Shuilder fully and satisfactorily performs such contract in accordance with

its Terms and Conditions and the Specification documents and drawings.

4.

The planned date of entry into service of each of the vessels is stated

in Annex A hereto.

5. The Hong Kong Government will contribute 75% to the capital costs (as

defined in paragraph 7 here to) of the vessels.

6. It is agreed that the Hong Kong Government shall not be liable for Value

Added Tax (VAT) in respect of any of its contributions made under this agreement:

for the avoidance of doubt it is declared that the Hong Kong Government shall not

be required to make any contribution towards any payment of VAT for which the

Ministry of Defence (Navy) may be liable in connection with the procurement of t

vessels.

7. For the purposes of this agreement, in addition to the Shipbuilder contract

price (as determined in accordance with Annex B), capital costs mean Ministry of

Defence (Navy) related costs in respect of -

(1) Supply items (Ship and Weapons);

(2) Support;

(3) Research and Development and Design;

(4) Overseeing;

(5) Transport;

(6) Trials; and

(7) Transit to Hong Kong,

as are more particularly described in Annex B hereto.

8.

The Schedule to Annex B shows Ministry of Defence (Navy) estimates of capit: costs at price levels obtaining in February 1981; it is agreed that, in assessing

contributions to be made by the Hong Kong Government under this agreement

in respect of Ministry of Defence (Navy) related costs, no assessment of charge

2