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CHICHESTER in order to try to avoid the need of a lengthy refit, the practice which has been adopted involves periodic docking in Hong Kong lasting about four to six weeks. Our intention would be to follow this practice for MERMAID after her 1977 refit (which would be necessary to bring her up to standard before this cycle could begin) but since we have no experience in operating a ship in this way for an extended period it is not possible to give a categorical assurance now that a further refit would not be necessary eventually.

Moreover, CHICHESTER has had the services of a Fleet

Maintenance Unit when carrying out maintenance at dockings, and there are no plans to provide such assistance for MERMAID. Maintenance at dockings will therefore have to be carried out by contract, and this may result in a lower standard of maintenance being achieved. This in turn might shorten

the period between refits.

4. As explained to Mr Wigham, in view of the Governor's stated preference for a frigate, the difficulties likely to be associated with refitting MERMAID in Hong Kong, and for reasons of RN operational and personnel planning and

dockyard scheduling, MOD has assumed for planning purposes that MERMAID will replace CHICHESTER in early 1978 after refit

in UK. A decision even now to alter this plan would raise difficulties; and these would increase markedly as time

lapses. If the ship were to be refitted in Hong Kong it

is expected that the planning of the refit and work on the weapons/communications fit would require the assistance of Royal Navy and Dockyard personnel from the UK and this would involve additional expense.

5. We are not clear whether para 2 of your telegram under

reference implies that you prefer the refit cost to be kept entirely outside the cost sharing agreement, or alternatively kept within it but dealt with on an actuals

rather than estimates, basis. The former would not commend

itself to us; the latter would not raise any issues of principle but we suggest it need not be decided on now.

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