SECRET
C
$. When the Ministry of Defence considered this matter in May 1900 they stated that if a Huntor force was stationed in Hong Kong it would also be necessary to provide part of an R.A.F. Regimant Squadron to protect the ascociated ground installations. However, Headquarters, Far East Air Force, have since reviewed this requiro- mont and now take tho view that it will not in fact be necoBBLDY staticn R.A.P. Regiment personnel in the Colony solely because of the presence of the Hunters there, This has naturally helped to keep costs down.
6. The figure of £335,000 does not include any element in rompect of the capital cost of the eight aircraft. The Ministry of Defonco have stated that were the aircraft not needed for Hong Kong, they would, in 1970, become ourplus to our requirements and in the normal course would be sold back to Hawker Siddeley for refurbishment and pooale to overseas customer3. There 10, apparently a great demand abroad at the present time for second-hand Hunters (0.2. from Singapore) and we are under constant political pressure to make them available from R.A.P. BOUT000. The Ministry of Defence estimate that they would receive from Hawker Siddeley a total of £300,000 (and not £280,000 as stated in the enclosed report) for the eight aircraft. However, rather more than half of this sum would havo to be paid over to the United States Goverment under off-shorO purchase arrangements; but the balance of about £140,000 would be recovered by the Ministry; and otationing the Hunters in Hong Kong would mean that Defence votes would forego this sum unless reimburson,
7. The Ministry propose that the Huntor dotachment should be established in Hong Kong in March 1970, the date when the Hunter Squadron in F.E.A.P. is due to disband. The aircraft would then be simply redeployed from Bingapore to Hong Kong and the expenco of returning them to the United Kingdom and of subsequently flying others out to Hong Kong would thus be avoided. To give effent to this arrangement, however, they say that a decision will have to bo taken by the spring of thin year on the question of meeting the costa of the init: this would allow F.E.A.P. sufficient time to solcot the aircraft for Hong Kong and to get the necessary servicing and refurbishment carried out. (The Tonsibility atudy mentioned that any F.E.A.F. aircraft would require part reconditioning, which would involvo acme 7,500 man-hours and take up to fivo montho to completo)
8. In sending us the enclosed Report, the "inistry of Defenco stated that the Chiefa of Gtaff had reiterated their etipulation that the costs of the dotuchment should not be borne by the defenco budget. They are accordingly looking to us to meet the costo and havo ooked up what arrangements we envisage to rodmburea them both for the actual oporating costs of the unit and for the net capital amount that they would otherwise receive by selling the aircraft back to Harker Siddeley. By their reformce to "actual" running conta, we agora that they are covering themselves against my possibility that the actual costs might excood the estimated costs as not out in the enclosed report. They have thus hit the ball firmly into our court and wo need to consult with you on the next step.
SECRET
/9.
;