(17260) Dd.897459 400m 12/72_G.W B.Ltd. Gn.863 (16940) Da.897300 400m 9'72 G.W.B.Ltd Gp 863
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry
No.
ECURITY CLASSIFICATION
CONFIDENTIAL AND PERSONAL
DRAFT LETTER
To:-
Top Secret.
Secret.
Sir Murray MacLehose KCMG MBE
Confidential& PERSONAL
HONG KONG
Restricted.
Unclassified.
PRIVACY MARKING
In Confidence
Type 1
+
FROM
A C STUART Telephone No. Ext.
Department HKIOD
DEFENCE AGREEMENT
1.
The Deputy Quarter-Master-General, Sir William
Jackson, came to Hong Kong recently for discussions
on the fact that the trigger point under
Article 3(i)(a) of the Memorandum of Understanding
had been reached, with inflation raising costs over
50% of the base line level. (Incidentally we did
not know of this visit in the FCO until it had taken
place.)
2. We understand from the Ministry of Defence that
your general reaction was that this was a technical
question; that the agreement provided for a review
if costs rose to this degree; and that the
suggestion of discussions leading to an agreement
on supplementary contributions was fully acceptable.
This is borne out by the Secretary of Security's
letter to me of 5 March.
First,
On
3. I think there are two questions at issue.
are discussions on Article 3(i)(a) appropriate and
timely in themselves; and second, what are the
implications for other concurrent developments.
the first question, I understand that it is common
ground that the trigger point has been exceeded.
has been bearing the escalation of capital costs up
to 50% and it seems not unreasonable, in view of the
/terms of
HMG