TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 192

IMMEDIATE

CYCHER/CATA

SECRET

19

TOP COPY

FROM HONG KONG 220458Z

SECRET

TO IMMEDIATE F.C.0. TELEGRAM NO. 66 OF 2 FEBRUARY 1971.

PERSONAL FOR MONSON.

YOUR TELEGRAM NO. 96.

DEFENCE CONTRIBUTION.

LAST

REF.

13)

NEXT

REF.

15

THANK YOU FOR THIS INFORMATION. I AM CONSULTING EXECUTIVE COUNCIL ON 9 FEBRUARY AND WILL REPORT REACTIONS THEREAFTER.

2. YOUR PARAGRAPH 2:-

(1) £2 MILLION AGREED AS THE NOTIONAL FIGURE, FOR PRESENTATIONAL PURPOSES HERE, AND, AS ALREADY INDICATED IN PREVIOUS CORRESPONDENCE, HVG WOULD BE FREE TO VIRE BETWEEN CAPITAL AND RECURRENT EXPENDITURE AS DESIRED. THIS HOWEVER FRE-SUPPOSES THAT ALL REPEAT ALL CAPITAL WORKS UNDERTAKEN WOULD REVERT TO HONG KONG IF NO LONGER REQUIRED BY THE ARMED SERVICES:

(2)(A) 1.CONFIRM THAT MINOR WORKS-ARE INCLUDED IN THE £2.2 MILLION, WHICH IS OF COURSE THE FIGURE CONVEYED TO US BY YOU:

(B) IT IS AGREED THAT SAVINGS OR EXCESS EXPENDITURE WILL LIE WHERE THEY FALL, BUT THIS ASSUMES THAT EXPENDITURE WILL BE AS FULLY AND CAREFULLY CONTROLLED AS IT WOULD BE IF IT WAS FALLING

TO HMG'S ACCOUNT,

(3) WE CAN AGREE TO A REVIEW REPEAT REVIEW IN THESE CIRCUMSTANCES PROVIDED OF COURSE IT IS POSSIBLE FOR HMG TO AGREE TO A REVIEW IF CAPITAL WORKS COSTS FALL MORE THAN 50% BELOW APRIL 1970 PRICES.

SIR D. TRENCH

FILES:

HKD

FED

SIR L. MONGON MR. MILFORD

RECEIVED IN REGISTRY No. $1

1971

минера

COPIES TO:

MR. R.J. SMITH, DOE.

堡

LAMBETH BRIDGE HOUSE.

MR. J.J. BRACK, TREASURY

+

MR. A.F. THORPE, R.0257, MOD,

MAIN BUILDING

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