(2)
10/9
of 18 May.
35
Hong Kong Defence Contributi
5 August, 1970.
21
Would you please refer to your letter (DUS(P)153/1)
24 I have now had a reply from the Govenor to the letter, of which I enclosed a copy in my letter to you of 11 June.
Although a considerable amount of work has been done on this exercise in Hong Kong, the Governor mys that there are so many imponderables in the available data (particularly as regards capital costs) that he and his officials have been able to arrive at any logionl total figure for their contribution which can be based on the cost of the garrisor. He has, therefore, suggested a figure which he thinks he may be able to put over locally without regard to any other considerations, This figure is £ta, per annum for the period of a five year agreement; of this, a maximm of £2n. per annum would, in the Governor's words, "be earmarked for non-recurrent capital works, these works to remain the property of the Hong Kong Government and to be selected from werks which are agreed by this Government to be of potential value to Hong Kong if no longer needed for ane by the Services".
The Governor has also suggested that the arrangement should be considered to be a basically stable one running for five years and subjest to review only if the garrison is increased or decreased by the equivalent of two (or more) major Arny mits.
These are the Governor's very tentative and persœcal proposals. He emphasises that they are based on a garrison at the level of 73 major units and thet he is by no means at all sure that he can get much a large increase (60 on the presont contribution by his calculations) accepted locally, lie saks for views on them.
Our feeling here is that the Governor is certainly right in his judgment that this is the maxirum he could hope to secure and that he will have difficulty in persuading his Executive Council and the Finenee Committee of the Legislative Comcil to agree to this figure: if a higher contribution is claimed, we shall in all likelihood become involved in the kind of unpleasant wrangle over details that we encountered when the present contribution vas negotiated in 1966.
E.H. Gwynn, Esq., C.B.,
Kinistry of Defence, Main Building,
Whitehall, S.V.l.
ви
SEGRET
20.8.70
(veken) Mor тба
6.8.
20
/I