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3. Although not convinced that the requirement was absolutely
essential, the Defence Secretary approved it provided the additional
cost (about £180,000 budgetary and £43,000 in foreign exchange in
each year) could be contained within the Defence Budget. The
Defence Secretary also asked that the possibility should be closely
examined of meeting the additional expenditure out of the present
cost of the Garrison. But the offsets so far put forward by Hong
Kong and endorsed by CINCFE have only gone a very small way towards
meeting the additional bill; consequently it has not so far been
possible to make much progress in deciding how this requirement
could be satisfied.
It seems unlikely that offsets for Hong Kong's
additional helicopter requirement could be found from elsewhere
in the world although this is a possibility which may have to be
considered.
4. The cost of the existing helicopter squadron in Hong Kong
and the proposals for an increase in establishment are not directly
related to a current defence contribution being made by the Hong
Kong Government towards the costs of British troops stationed in
the Colony. The current arrangement introduced in April 1967 for
a four year period provides for payments totalling £4.525M annually.
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