1
46
720
300
214
SECRET UK EYES A
Subsequent exchanges have resulted in the Minister being
given discretion to settle for £25M in the first year,
rising to 75% in the second or third years if agreement
can be reached on this basis.
6. On the basis of the frigate option, the reduced
garrison.is estimated to cost HK 2468M in 1976/77.
Thus
our objective must be to secure a new agreement, on the
basis of a 43 units garrison, under which Hong Kong will
in 1976/77 pay 75% of this figure i.e. HK 8351M
contributions in subsequent years depending on the rate
of inflation. If Hong Kong prefer the patrol boat optinn
this figure becomes HK $347M. As a fall-back position we
can settle for HK 8264M (£25M) in the first year rising
to HK $351M (or HK $347M) in the second or third years.
7. Any further concession would require reference to
London and although a minor variation might be authorised
by telegram a major change will probably necessitate a
return to London and a DOPC meeting. An alternative formula
starting at a lower point but rising above 75% in the later
years of the agreement might well be acceptable to Ministers.
༢་
SECRET
-24-
UK EYES A