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Part I to COS 16th Meeting/68 12th March 1968

Australia did not wish to aggravate her relations with Indonesia, and this might have an effect on any build-up of Australian air defence forces, which could only point to an Indonesian threat.

e. The attitude of Malaysia and Singapore to the build-up of air defence forces, and consequently to co-operation in air defence, was somewhat different. Singapore seemed anxious to build up a sophisticated air defence system quickly to impress potential investors. The Malaysians, on the other hand, planned to build up their own defences but in a different time-scale, and, by enlisting as much help as possible from the other Commonwealth countries concerned, at small cost. Thus, while both countries were willing to co-operate in the building up of an air defence system, each was anxious not to prejudice the ability to operate its own independently. Australia, the country who would clearly play the key part in any future co-operative defence venture, being cautious since she was anxious not to over- commit herself. She had, however, made it clear that there would be no Australian presence unless Malaysia and Singapore co-operated in defence matters. There had been little progress in the Army and Navy Advisory Working Groups so far. Malaysia was clearly not interested in co-operating with Singapore on Army training and Army training facilities, since the co-operation would, of necessity, be one-sided. There were however, advantages to be gained on both sides by co-operation in naval matters.

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f. As regards maintenance of our facilites, the Ministry of Works had agreed that such buildings as were to be used by our Allies after our departure would be handed over in good order. However, the maintenance of facilities at Tengah airfield posed a special problem which hinged on future plans for air defence.

g. It would probably be physically possible to rundown the dockyard in a period of nine months but only if the decision not to commercialise it were taken by 1st April 1970. Singapore showed firm intentions of commercialising the dockyard but this depended upon financial support which would have to form part of the aid programme. Currently HMG were studying the problem to see if aid for this project could be justified. It was possible that commer- cialisation would be conducted in two stages; the first to commercialise without any new dry dock facilities and to hand over management to Swan Hunter by the end of 1968, to be followed later by the building of a new dry dock, either at the naval base or at Jurong.

It was agreed that the outstanding questions on Command structure such as the future naval command

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