TNAG-0369-FCO40-415-Visit-of-Edward-Heath--UK-Prime-Minister--to-Hong-Kong--12-1-1974 — Page 154

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Hong Kong Defence Contribution

Traditionally Hong Kong has made a contribution to HMG

towards the cost of its defence and of the assistance which

Her Majesty's Forces provide for internal security. In 1966

чмок following negotiations between the Colonial Secretary and the

Hong Kong Government, this was fixed at £5M a-year for 4 years

from 1 April 1967. The cost to HMG of the Hong Kong garrison

was considerably in excess of the £5M contribution, even before

the provision of additional forces as a result of the disturbances

in 1967 and taking no account of pay and price increases. There

was therefore a strong case for a substantial increase in this

amount when the previous agreement expired in March 1971. Following

prolonged negotiations with the Hong Kong Government, the settle-

men described in paragraph 2 below was reached in October 1971.

The Ministry of Defence accepts that the average of £8M per annum

is the most which could have been obtained from Hong Kong, although

it represented less than a third of the cost of the garrison at

that time. At current prices estimated annual cost of the

garrison for 1973/74 is £34M and the average over the next 10 years

is assessed at £36M (in functional cost terms).

The present contribution: £40M spread over 5 years, starting

1 April 1971, made up as follows:-

Cash contribution

Capital works

£12M (at £2.4M per year)

1

Maintenance and minor works

£17M (£2.9M for the first and

second years, £3.4M for

the 3rd and £3.9M for the

4th and 5th years).

£11M (£2.2M per year)

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