From:

JD Bryars Assistant Under

Our reference: AUS(GS) 427/74

Your reference:

A.C.Stuart, Esq.,

Hong Kong Department

SEGRET

Secretary of State (General Staff)

MINISTRY OF DEFENCE Main Building, Whitehall, LONDON S.W.I

Telephone: 01-**** 218 6476

6476..

Foreign and Commonwealth Office King Charles Street

SW1A 2AH

Dean Stuart

HONG KONG:

222

-4 DEC 1974

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2 December 1974

10/9

✓ Say 3/12

copies or hale

Ar Jackson

If the coatings are

on the 9th

I think

before the Governor's

And the Summary to HK,

NEW DEFENCE COSTS AGREEMENT

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mailath

I mentioned to you on the telephone towards the end of last uld

week that I had been taking stock with those concerned in the Ministry of Defence on the costing of the future Hong Kong garrison.

2.

The present hope is that the costing will be completed on or soon after 9 December. The intention would be to present the figures in an entirely straightforward way and with a clear explanation of the qualifications and uncertainties to which they may still be subject. We envisage a summary of the total costs, showing in outline the breakdown between the Services and the Works component, backed up naturally by a more detailed analysis of the figures in each of these areas.

3. The method of presenting the costings to the Governor will require careful consideration. The feeling here was that to avoid over hasty reactions and to assist the Hong Kong officials to get a real understanding of the basis of the figures, it might prove attractive to send the Governor the summary initially and to encourage him to send a team to the UK to be briefed on the supporting analysis. You felt that the Governor should certainly be offered the opportunity to send a team, but should not be pressed on this point and I agree that this will be sufficient.

4. We both felt that our aim should be to obtain the Governor's reactions to the costings during his visit later in the month, after which hopefully it may be possible to draw up more detailed plans for action towards financial negotiations proper subject to Ministerial guidance as appropriate.

Yas suiceely В

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