*
A
CONFIDENTIAL
(10) the sum of £0.25 million
—
the difference between the
approved and annnounced figures is found from the FCO's
Unallocated Provision.
3.
Finance Department agree.
Background
4.
The Chief Secretary's letter of 6 June gave agreement to a
discretionary claim of up to £4.25 million from this year's Reserve to provide emergency temporary accommodation for Vietnamese boat people in Hong Kong. Up to £4 million was for the conversion of the
barracks at Lei Yue Mun, and £0.25 million was for tents.
B
5. The Hong Kong Government have decided not to proceed with their plan to convert Lei Yue Mun: the barracks there are serving
as a holiday home for local people and there would be strong local opposition to its use for boat people. They have identified
various alternative projects that would provide emergency
accommodation for some 23,000 people at a cost of up to £4.5 million. They are seeking our agreement to the reallocation of the
approved HMG funds to these projects.
C
6.
Two problems have now arisen:
(a) The Treasury cannot accept that the current proposal falls
within the terms of the Chief Secretary's agreement. They say that the Chief Secretary's original authority was based on the need to provide accommodation for 7,000 people. They are only prepared to authorise expenditure of £2.5 million, based on earlier estimates of the cost of the Whitehead project, which alone would provide
accommodation for 9,000 people, thereby meeting the original
accommodation objective. In fact the Hong Kong Government have already covered two thirds of the cost of the Whitehead project
from their detention centre project vote.
CONFIDENTIAL
Page 45Page 46