3.
CONFIDENTIAL
DEFENCE REVIEW
COST OF THE PROPOSED HONG KONG GARRISON
Annex A
1.
As agreed at the meeting at MOD on 23 October 1974, the cost of the proposed Hong Kong garrison has been revised and detailed figures have been prepared for each of the years from 1976/77 to 1980/81. Estimates of both budgetary and foreign exchange expenditure have been made. A summary of these costs is at Annex A.
2. The costs reflect the present state of planning, but they must still be considered as provisional until the proposed organisation and manning levels,
FINAL particularly in the support area, have received a MOD approval, probably by the end of January 1975. In some instances eg Air Trooping and Works Services, only a broad estimate of cost is available at this stage. Revised figures will be produced as soon as possible.
3. All the figures quoted are at 1975/76 estimates prices ie the price levels prevailing at SEPTEMBER 1974. No attempt has been made to assess the impact of future inflation. Excluding Naval capital costs the average annual expenditure is approx £41 (£34m at LTC 74 prices). The detailed revision of costs therefore represents a real increase of approx £3m over the figures provided in October. Apart from minor adjustments to the original costing figures, most of the difference arises from the inclusion of charter costs for air trooping from UK and Nepal to Hong Kong. This is currently an RAF task.
4.
The costing is based on the following teeth arm units:
RN
1 FRIGATE
3 PATROL CRAFT
ARMY
RAF
1 ARTILLERY BATTERY
1 BRITISH INFANTRY BATTALION
4 GURKHA INFANTRY BATTALIONS
2 GURKHA ENGINEER SQUADRONS (1 IN THE INFANTRY ROLE)
1 HELICOPTER SQUADRON
!
The reorganisation of the UK content of the garrison will not be complete until Deadly 1972 the Gurkha battalion moves from BRUNEI. The present planning, assumption, Subject is cansuccación mit lt Sultan, is that this may not be nucil carly 1977.
5. The total costs of all forces and units in Hong Kong have been included. Apart from air trooping and freight shipments, the only other costs shown as being attrib- utable to Hong Kong are those of the Gurkha Line of Communications in Nepal. Nothing has been included to cover extra costs in the UK such as pro rata shares of the training and storage, supply and repair organisations. The Capital costs of the new patrol craft which are due to come into service in 1982, are shown separately. On present plans the new craft are expected to cost about £3.3m each and substantial expenditure is expected to be incurred from 1979/80 onwards.