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3. We shall need to reply to Mr Hamilton in due course
but I recommend that this is deferred until after further
contacts at official level have taken place between the FCO and MOD, and certainly until after Ministers have discussed
the issue with the Governor.
Background
4.
The Government decided in 1987 that there would be a
continuing requirement for the Royal Navy's three Peacock
Class patrol craft, at least until 1991 when the Hong Kong
Maring Police (MARPOL) would be ready to assume the Royal Navy's deep water anti-illegal immigrant role. A decision
on the longer term future of these patrol craft was however
deferred. There can be little doubt that the Chinees expect
the craft to be retained.
5. The MOD acknowledge that there might be a political
requirement to provide some form of Royal Naval presence
afloat until 1997, but see no military requirement for a continued presence. Consequently, no financial or manpower provision has been made for running the Peacock Patrol Craft
after 1991/2.
6. The arrangements for the procurement, running costs and disposal of the patrol craft are: Hong Kong contributes 75% of the capital costs of purchasing the vessels; running
costs are shared in accordance with the Defence Costs
Agreement current at the time (ie 65% paid by Hong Kong; 35%
by the MOD); and when the vessels are withdrawn or sold, 75%
of the market value will be credited to the Hong Kong
Government.
7.
The cost of retaining three patrol craft until 1997 is
estimated to be £43 million (at current prices) over five years of which MOD would pay £15 million. The total cost of
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