TNAG-0538-FCO40-633-Strength-of-garrison-in-Hong-Kong-1975 — Page 22

This would have the advantage, from Hong Kong's point of view,

of avoiding too sudden an increase in the cost to them of a reduced

force.

Questions for consideration

8.

The first question, therefore, is do Ministers agree that, among

other options, a study should now be made with Hong Kong officials

of the full security and political implications of a garrison

costing about £35M, on the basis that such a garrison 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 £17M, which

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

half the cost of the £40M garrison.

10. If therefore we do not succeed in getting llong Kong to bear

three-quarters of the cost, would Ministers consider, in the light

of their conclusions at OPD(74) 15th Meeting, that an attempt should

be made to bridge the gap? For example -

(a) by increasing both the UK and Hong Kong offers, eg to

one-third and two-thirds of the cost (£121 and £23M respectively

for a £35M force, or £13M and £27M for a £40M force); or

(b) by increasing the proportion paid by the Hong Kong

· Government over a period of an Agreement lasting say 5-7 years

SECRET

A - 5

UK EYES A

SECRET UK EYES A