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immediately after the deployment of MARPOL's first 2 new SC launches in 1987 would be unrealistically premature.

It is therefore recommended that all 5 PC continue to serve in Hong Kong in accordance with the existing DCA agreement until this expires in Mar 88. There will then be a continuing requirement for 3 PC at least until MARPOL's second batch of 3 improved capability SC launches have assumed the RN's anti-II

role ie not before 1991.

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Our options for the future of these

3 PC in Hong Kong will remain wider, and we will preserve flexibility, if we defer a decision on this subject until 1990 (see Annex A para 2(a) serial 4). By that date clearer assess- ments of the need for a RN presence and of the risks of with- drawal may be possible.

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55. In deciding the future of the PC particularly if the force was to be split operational, training, engineering, logistic and financial penalties will need to be taken into

account.

FUTURE OF 3 RAIDING SQUADRON ROYAL MARINES (3 RSRM)

56. At present, 3 RSRM is effectively maintained as part of the garrison on a 2-year renewable contract. 3 RSRM's Fast Pursuit Craft (FPC) are currently the only assets in Hong Kong

able to operate successfully against speedboats smuggling goods or IIs between the Territory and the Chinese mainland. However, HKG plans to establish MARPOL FPC operations during 1988, whereupon 3 RSRM could be withdrawn although 2 FPC could be retained to be operated by RN/RM crews from the duty

PC. This last aspect is a subject for further study.

OTHER RN ASSETS

57. Subject to HKG's development of its own facilities, RN diving, re-compression and EOD teams could be withdrawn by about 1990. Contract arrangements for some of the RN's small craft services, notably ferry operations, may prove cheaper or

be desirable for other reasons; if this is confirmed, reductions

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COS S/184 (2)

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