30. 444 Signals Unit. This unit (at Stanley) is a part of It appears to represent
the Defence Communications network.
a very heavy expenditure for a very small return but a decision on its reduction would also have to be made in the Ministry of Defence in London. The upkeep of this unit should once again be considered to be the responsibility of the UK and not the Hong Kong Government and this should not be considered to be part of any future defence costs agreement.
37.
Royal Air Force Kai Tak. This station merely supports the other units and provides the back-up and passenger handling facilities for RAF aircraft coming to and staging through Hong Kong. Its future must inevitably be bound up with that of the Royal Air Force Transport Force.
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38.
POLITICAL AND FINANCIAL CONSIDERATIONS
Under the present defence costs agreement, the Hong Kong Government had undertaken to make a contribution of £40M spread over the period 1971-76. At the time of negotiation this sum amounted to an estimated half of the local costs of maintaining the Services in Hong Kong as was equal to an estimated 30% of their total cost. Inflation has long ago destroyed these proportions, resulting in increased charges on HMG, although the Hong Kong Goverment has recently agreed to an increased contribution of £3M, in the sum allocated for the capital building programme, on account of inflation. In consequence, what is now £43M will be divided:
39.
a.
£20M in the capital works programme, which could be regarded as very approximately £4M annually.
b. £11M for minor works and maintenance.
C.
£12M as a cash contribution which amounts to £2.4M per year towards the annual running costs of £15M.
The defence costs agreement contains a clause under which it is liable for review if the Garrison strength, of 6} major units, should be varied by more than one major unit. If the Garrison were to be subjected to an arbitrary cut, the long Kong Government would not feel itself bound by the financial arrangements of the present agreement and might wish to take a less generous line in the next agreement, On the other hand, pressure from the UK Government to transfer to long Kong more of the costs of maintaining the Garrison, bringing the contribution closer to the proportions at the time of the previous negotiations, might be somewhat more successful if the Garrison could be shown to be designed, or at least very largely designed, to meet the internal security needs of the Colony.
40. In any consideration of Hong Kong force levels, it is useful to compare the maintenance costs of British and Gurkha battalions. At 1973 prices the annual capitation rate for a
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