TNAG-2674-FCO40-3871-Hong-Kong-garrison-withdrawal-plan-1993 — Page 31

5

Annex A

HKG queries on 1992-93 outturn

Difference between original forecast

and actual expenditure

The original forecast for 1992-93 as supplied by HQBF in August 1991 estimated HKG liability at £57,060,000 and $954,238,000. These were adapted figures, which excluded sterling assessed costs to be paid in HKS.. The unadjusted

figures were quoted as £74,502,000

EKG liability

$734,469,000.

and

Underspend Factor

2.

HKG

After

considering past spending performance, and

accordance with recognised budget forecasting techniques, applied an underspend factor of 5% to the unadjusted

figures. This gave rise to discounted figures of £70,776,900

and $697,745,550.

Exchange Rate

3.

€ 1

The HQBF forecast had assumed an exchange rate of

= $12.60 for the purposes of adjusting the estimate of HKG

liability. HKG in its forecast was more conservative, and

assumed $13.50.

HKG Estimate

4.

Thus

the

amount sought by HKG in the draft

Estimates

for

1992-93

was $1,653,234,000

being

£70,776,900 x $13.5

$955,488,150 plus $697,745,550.