SECRET
CRS 739
PRIORITY
CYPHER CAT/A
FM HONG KONG 1803352
SECRET
RECEIVED IN REGISTRY No.51
1 8 SEP 1975
NKCION
TO PRIORITY F C O TELEGRAM NO 924 OF 18 SEPTEMBER.
DEFENCE COSTS.
MIPT.
*I*
REX
REF.
278 1289
DEFENCE REVIEW.
སྐ།
279
COPY
1
262
THE FOLLOWING ARE THE POINTS ON WHICH I BELIEVE WE SHOULD TRY
TO REACH AGREEMENT PRIOR TO THE VISIT OF MR RODGERS :
1. DEFINITIVE COST OF 4 1/3 GARRISON:
(A) FURTHER TO PARA 1 OF MY TELEGRAM NO 867 OF 3 SEPTEMBER AND
FOLLOWING DISCUSSIONS WITH H Q B F AND CONSULTATION WITH
MOD AN ATTEMPT HAS BEEN MADE TO UPDATE THE COST OF THE GARRISON FROM THE SEPTEMBER 74 BASE, USING ACTUALS, WHERE AVAILABLE, AND THE INFLATOR INDICES IN SOME CASES, WE NOW CALCULATE THAT THE COST OF THE GARRISON OF 4 1/3 MAJOR UNITS, @ HELICOPTERS AND A FRIGATE AT SEPTEMBER 75 PRICES IS HONG
KONG DOLLARS 445,5MILLION, DETAILS ARE SET OUT IN HQ B F PAPER REFERENCE HK 10039/1 G SD. A COPY HAS BEEN SENT TO
JONES IN MOD FOR COMMENTS. PLEASE CONFIRM THAT THE FIGURES
USED ARE ACCEPTABLE,
(8) I HOPE THAT WE CAN GET M O D'S FIRM ESTIMATES AT SEPTEMBER
1975 PRICES BEFORE STARTING THE SUBSTANTIVE NEGOTIATIONS,
IT WOULD BE MOST DAMAGING TO REACH AN AGREEMENT BASED ON ONE
SET OF FIGURES ONLY TO FIND THAT THE AMOUNTS HAVE CHANGED
SIGNIFICANTLY WHEN THE ESTIMATES OF COSTS ARE DRAWN UP, YOU
WILL APPRECIATE THAT THIS IS OF MUCH MORE IMPORTANCE TO HONG
KONG THAN THE UK. BECAUSE OF THE INFINITELY GREATER BUDGETARY
SECRET
/SIGNIFICANCE
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