000
GOVERNMENT HOUSE
HUNG KUNG
91
6-14 14:25
CONFIDENTIAL
機密
ANNEX
PHGE ØS
Buying out MOD's share of the patrol craft
The wong kong Government see the following difficulties in MOD's proposal that we should buy out their 25% interest in the patrol craft, which we could then man and operate, probably under the white ensign and with some RN loan personnel:
(a)
(b)
(¢}
In order to obtain funding to buy out MOD's interest in the vessels, and pay running costs, HKG would have to seek Finance Committee approval of funds. It would be difficult for us to explain why we had to buy out MOD's share at this stage, and why the cost-sharing arrangements under the DCA should not continue to apply. Such an approach to Finance Committee at this stage could probably lead to calls for a review of the cost sharing arrangements under the DCA.
Were we to take over the vessels as proposed, we envisage considerable operational difficulties. It is unlikely that we could maintain the vessels to fully operational standards at much less than present RN costs. We have limited experience in the maintenance of such equipment and would probably require to retain and pay for full professional and technical back-up, possibly on loan service terms. The arrangement would pose considerable difficulties in terms of operational command: would they accept orders from the Police or the RN?
aspect was examined in considerable detail in 1987 when we concluded that such integration was impractical and not cost effective.
Whilst it may be possible for us to operate the vessels at less than their total current operating costs, the costs to be borne by the HKG will be more than our current 65% share. This position would present considerable presentational difficulties with Finance Committee which might result in a refusal to approve funds for the purchase and operation of the vesssels.
∞.