GRS 126

IMMEDIATE

CYPHER CAT/A

FM HONG KONG 220700Z

SECRET

01

22 OCT 1975

(321)

SECRET

MILKIO))

TO IMMEDIATE F C O TELEGRAM NO 1046 OF 22 OCTOBER.

DEFENCE COSTS.

FROM SECRETARY FOR SECURITY DAVIES.

PLEASE PASS FOLLOWING TO AUS (GS) ANDREW, M O D.

''REFERENCE A F C O TELEGRAM NO 755 OF 2 OCTOBER REFERENCE B HONG KONG TELEGRAM NO 924 OF 18 OCTOBER REFERENCE C HONG KONG TELEGRAM NO 985 OF 5 OCTOBER.

330

ACCORDING TO OUR RECORDS, THE FOLLOWING ARE OUTSTANDING POINTS ON WHICH WE STILL AWAIT YOUR COMMENTS, HOPEFULLY BEFORE MR. RODGERS ARRIVES:

1. DEFINITIVE COSTS

WE TRUST THAT THE REVISED COSTING AND YOUR COMMENTS ON EXCHANGE RATES AND STERLING DRAWING ASSUMPTIONS CAN BE SENT WITHIN THE NEXT DAY OR TWO, TO ENABLE US TO EXAMINE AND DISTRIBUTE TO UNOFFICIALS BEFORE THEY MEET THE MINISTER.

2. CAPITAL WORKS

WE AWAIT REALISTIC MAXIMUM AND MINIMUM FIGURES FOR INCLUSION

IN THE M O U, TOGETHER WITH YOUR CONCLUSIONS ON THE MAINTENANCE

ITEM.

3. REINFORCEMENT

WE HAVE USED THE AGREED FORM OF WORDS IN DISCUSSION WITH

UNOFFICIALS (WHEN THE POSITION OF THE BRUNEI BATTALION WAS RAISED) BUT NEED, AS SOON AS POSSIBLE, A SUITABLE PUBLIC LINE. THE LOCAL PRESS, HAS BEGUN TO TAKE UP FIRM POSITIONS ON THE FORTHCOMING NEGOTIATIONS.

SECRET

NAVY

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