TNAG-0310-FCO40-346-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 166

CONFIDENTIAL

FROM R J SMITH

DEPARTMENT OF THE ENVIRONMENT

MINISTRYXORX

RUBLIC BUILDING AND WORKS

LAMBETH BRIDGE HOUSE, LONDON S. E.1

Telephone: RELiance 7611

143

CONFIDENTIAL

Our ref: DSO 1112/30

A W Gaminara Esq

Hong Kong Department

Foreign & Commonwealth Office

Room 247

King Charles Street

London SW1

Dear Gaminara,

DEFENCE AGREEMENT

HONG KONG

LAST

REF

(41

+1)

25 August 1971

NEXT

REF.

We had a quick word on the telephone about the third paragraph of Brack's letter 2 DM 415/01 of 23 August to me and I think I ought to register what I foresee will be the position vis-a-vis the new Agreement unless we quickly go ahead on the lines proposed and with which Brack agrees.

You will remember that in connection with one of your recent exchanges with the Governor we reviewed the figure of £m17 for capital works. We certainly hesitated about it, as you may remember, but one reason for sticking to it was our assumption, correct I hope, that the Governor would find it embarrassing if he were now told it would be something less.

We are, I am afraid, rapidly approaching the stage at which we shall have to tell you that we can no longer keep to the £17 million figure for cpaital works for the reasons given in my letter to Brack. We shall I expect be able to say, one way or another, about this in a week. If we do have to reduce it to £m15 or £m16, I imagine the effect on the Governor will be fairly electric and he will most likely want to reduce the annual contribution correspondingly, and he will naturally want to know the reason. I would not care to have to explain it to him. How can we justify holding back our works requirements on any grounds connected with the new Agreement when their sole justification is that they are necessary to meet military requirements in Hong Kong? Whether they are covered in whole, part, or not at all, by the new Agreement is a secondary issue and we must avoid the trap of putting secondary issues. first.

The foregoing indicates the sort of tactical difficulties you will quickly run into if we do not now go ahead on the lines I have suggested.

Incidentally, to answer Brack's fourth paragraph, we would simply carry on with the PWD and the Hong Kong Finance Department. There would be no point in bringing the Governor into it.

Cope's go to Brack" Thorp.

PA.

λ

AMS

RECVED IN

REGISTRY No.51

26 AUG 1971

26.812 - HK/10/9

Yours sincer

John Sunth