Mr
3PM
21/Now.
Hong Kong Department
Copies to:
PS/Lord Caithness Mr McLaren o.r.
SECRET
(48)
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НКС 062
/1
27 NOV 1990
we gorz
Ris/11
Miss Marsden"
Mr Stone
How far have
on arranging
with MOD
a meeting
刈
ROYAL NAVAL PRESENCE IN HONG KONG
1. Major General Peter Duffell, CBF Hong Kong, called on me yesterday.
2.
دسة
His major concern was obviously the future of the Ghurkas, he referred to the five options likely to be considered in the MOD and said that he expected some initial conclusions to be drawn by the Army Board in 10 days time or so. We can presumably expect that MOD Ministers will consult us later in the year as requested in Mr Lennox-Boyd's recent letter to Mr Hamilton.
3.
The CBF was much concerned also by the continuing standoff between the Hong Kong Government and the MOD over the question of the Naval Patrol Craft. The issues are set out in Hong Kong telno 3205. The financial climate has worsened considerably since the spring and it is far from clear that even the deal which the MOD were contem- plating then is still on the table. The Hong Kong Government's key requirements remain that whatever solution emerges should broadly reflect the agreed 65:35 cost sharing arrangments of the 1988 DCA; and that there should be no question of having to go back to the LEGCO Finance Committee. But I had the impression that, because of seriously bruised relations following the last DCA negotiations the actual discussions between MOD and the Hong Kong Government finance people had not been as good as one might have expected.
4. I am seriously alarmed at the risk that, for financial reasons at this end, the MOD may decide that they can no longer provide Hong Kong with the Patrol Craft. Echoes of what happened over the Falkland Islands in 1981 are strong. The removal of the Patrol Craft would surely send a most damaging signal to the Chinese about the willingness of the British Government to maintain Hong Kong's defence. We must avoid any such precipitate decisions and
impress upon MOD and Hong Kong Government the need to reach agreement.
5.
I do not think this is yet the time to involve Ministers but we have already agreed that it would be useful to convene a meeting with the MOD before the planned December visit.
7 November, 1990
SECRET
Andrew Runn
RA Burns
1