TNAG-0537-FCO40-632-Strength-of-garrison-in-Hong-Kong-1975 — Page 17

SECRET

UK EYES A

avoiding too sudden an ine erse in the cost to thot of a Puste

force.

Questions for corsiueration

8.

Ministers are, therefore, asked whether they agree that a

study should now be made with Hong Kong of the implications

of a garrison costing about £35M, on the basis that such a

garrizon might form an element of a compromise agreement with

Hong Kong

9. But, whether such a garrison were acceptable or not, there

will still be a gap between Ministers' desire that Hong Kong

should pay three quarters of the cost and the Governor's figure

of 217M, which would be about half of the cost of a £35M garrison

and rather less than half of the cost of the £40M garrison. Do

Ministers agree that an attempt should be made to bridge the gap

from both ends? Two possible ways of achieving this would be:

(a) to increase both the UK and Hong Kong offers, e.g.

to one-third and two-thirds of the cost (12M and £23M

respectively for a £35M force, or 13 and £273 for a

£40M force) or;

(b) to increase the proportion paid by the Hong Kong

Government over a period of an Agreement lasting say

5 7 years from £17M in the first year (about half of

the cost of a £35M garrison and rather less than half

of the cost of the £40M garrison) to three-quarters of

the cost at the end of the period.

Would Ministers agree that we should start negotiations on the

basis of (a) above and work out illustrative graduated schemes as

at (b) above as a fall back position?

10. If Ministers agree, a report on the implications of a £35N

will be made, and a decision on guidelines for negotiation sought,

with the objective of reaching agreement with Hong Kong in May SECKET

-11-

UK EYES A