KYA/S15/10-4
SECRET
From:
AF Thorp, OBE
Head of Fl(Air)
Our reference: Your reference:
A/16/ABD/6305
MINISTRY OF DEFENCE Main Building, Whitehall, LONDON S.W.I
Telephone: 01-930 7022, ext. 7189
10 August 1971
A W Gaminara Esq
Foreign & Commonwealth Office Downing Street
SWI
RECVED IN
REGISTRY No.51 16 AUG 1971
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кет Пашал Garenn
HONG KONG DEFENCE AGREEMENT
1.
To avoid any possible misunderstanding
I am commenting on your draft reply to the Governor's telegram 528 and on 129) Smith's letter of 9 August, DSO 1112/30.
I would suggest that we add the words "to £17M" after "capital element" in line 8 of paragraph 2 of the draft telegram.
2.
As regards Smith's suggested new paragraphs 3, 4 and 5, I would propose a revision of his paragraph 3 on lines which I have discussed with him generally. It would read as follows:- "3. However in accepting this, we would need some refinement of the condition in your paragraph 3(B). We accept that in the unlikely event that we were forced to reduce the works programme to an extent that £17M could not be spent in the 5 years, there would be no increase in the cash contribution. On the other hand, if £17M was not spent in the 5 years because PWD was unable to complete the specified programme in time, we would expect the balance to be made up in cash. Virement between one year and another, would remain
an essential feature.
3. I consider Smith's para 4 is particularly important and would only suggest the deletion of "throughout" in line 2 of his paragraph 5.
40 I understand from Brack that you are considering adding a paragraph to your draft telegram with the idea of the Governor drawing out the Unofficials into some further discussion on the percentage of revenue which the contribution represents. It was my impression that it was the Governor and not the Unofficials who argued about the figures which had been quoted. It would seem to me highly undesirable to introduce further complications on this item at this point in time.
5. In all the circumstances it would seem desirable that we should have a short meeting to endeavour to agree the final version of the reply to be sent to the Governor.
6. Copies of this letter go to Brack and Smith.
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sencerely
Jens
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