TNAG-0479-FCO40-544-Strength-of-garrison-in-Hong-Kong-1974 — Page 179

GRS 700

IMMEDIATE

CYPHER CAT A

SECRET

FM FCO 1417517

DEDIP

SECRET

DESKBY 150891 Z

TO IMMEDIATE HONG KONG TELNO 882 OF 14 OCTOBER.

1974

LAST

PERSONAL FOR GOVERNOR FROM WATSON.

BEF

118

YOUR TELNO 973; DEFENCE REVIEW.

RFF.

139

137

1. AFTER FURTHER EXAMINATION, INCLUDING DISCUSSION BETWEEN CDS AND CBFHK, MOD CONSIDER THAT MILITARY REQUIREMENTS COULD BE MET BY A GARRISON OF 5 AND TWO THIRD UNITS, AND A REINFORCEMENT CAPABILITY AS SET OUT IN PARA. 3 OF MY TELNO. 835. THEY WOULD REGARD THIS FORCE AS AN ABSOLUTE MILITARY MINIMUM. A BREAKDOWN OF THE FORCE IS IN MIFT. THE COST, INCLUDING THE FRIGATE, WOULD BE ABOUT £31M, WITHOUT THE FRIGATE, BUT WITH FIVE PATROL CRAFT, IT WOULD COME DOWN TO ABOUT £29M.

2. MOD STRESS HOWEVER THAT THESE FIGURES HAVE BEEN PRODUCED ON

AN ''ANNUAL AVERAGE COST" BASIS. WHEN A PERCENTAGE CONTRIBUTION

IS AGREED, THEY WOULD EXPECT THE HONG KONG GOVERNMENT TO PAY THIS PERCENTAGE OF THE ACTUAL ANNUAL COST. THEY HAVE SET IN HAND A DETAILED EXERCISE TO ESTIMATE THE COSTS FOR THE FIVE YEARS FROM 1976/77 ONWARDS ON A YEAR BY YEAR BASIS, TAKING INTO ACCOUNT SUCH PLANNED CHANGES AS THE INTRODUCTION OF NEW PATROL CRAFT, AS WELL AS A FURTHER DETAILED STUDY BY THE ARMY DEPARTMENT AND LAND FORCES

HONG KONG ON THE IMPLICATIONS OF THE NEW FORCE LEVEL. THE LATTER STUDY WILL NOT BE COMPLETED BEFORE JANUARY 1975.

3. AS REGARDS TIMING, WE HAVE BEEN PRESSING IN OFFICIAL LEVEL DISCUSSIONS FOR A RECOMMENDATION TO MINISTERS THAT FORMAL NEGOTIATIONS SHOULD, AS YOU WISH, NOT BEGIN UNTIL MAY 1975. THERE IS UNDERSTANDING OF THE PROBLEM, BUT EVEN IF MINISTERS VERE WILLING TO AGREE, IT HAS BEEN ARGUED:

(1) THAT THE CHANCES OF YOUR SECURING A SATISFACTORY HONG KONG CONTRIBUTION WOULD BE LESS AFTER YOU HAD NEGOTIATED THE TAX

SECRET

/INCREASES