SECRET UK EYES 'A'
if
DEFENCE REVIEW:
HONG KONG
Treasury Amendments to Draft OPD paper attached to Mr Bryars' minute of 30 January
Paragraph 6(c)
Add at end "A variant of this option would be to
press the Hong Kong Government to pay three-quarters of the cost of
the reduced garrison, ie to raise their contribution to £27m."
Paragraphs 9 and 10
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fot succeed
in gething Hos Kong to
Substitute the following:
"9. But, whether such a garrison were acceptable or not, there
will still be a gap between Ministers' desire that Hong Kong
should pay three-quarters of the cost and the Governor's
figure of £17m, which would be about half the cost of a
£35m garrison and rather less than half the cost of the
£40m."
"10.
2
The first question therefore is do Ministers consider that, biting agilsinltd that
would nothwithstanding the Governor's view, Hong Kong should still be
-pressed to bear three-quarters of the cost, or do they consider
that an attempt should be made to bridge the gap from both
ends?"
"11.
In the latter case, there are two possible ways of
bridging the gap:-
(a) to increase both the UK and Hong Kong offers, eg
to one-third and two-thirds of the cost (£12m and £23m
respectively for a £35m force, or £13m and £27m for a
£40m force) or;
(b) to increase the proportion paid by the Hong Kong
Government over a period of an Agreement lasting say
5-7 years from £17m in the first year (about half of
the cost of a £35m garrison and rather less than half
of the cost of the £40m garrison) to three-quarters of
the cost at the end of the period.