SECRET
202
*GR 500A
PRIORITY
CYPHER/CAT A
FM FCO 021150Z
SECRET
TO PRIORITY HONG KONG TEL NO 755 OF 2 OCTOBER 1975
YOUR TEL NO 924: DEFENCE COSTS
MOD HAVE ASKED US TO PASS THE FOLLOWING:
RECEIVED IN REGISTRY No.51
->
OCT 1976
NKKIOL,
BEGINS
YOUR PARA 1.
Ref.
279)
295
WE CONFIRM THAT THE REVISED COSTING PRODUCED BY HQBF IS ACCEP- TABLE SUBJECT TO SOME VERY MINOR POINTS OF WHICH HQBF ARE AWARE,
AS THIS IS ONLY A ROUGH UPDATE WE PREFER TO TALK IN TERMS OF A
GARRISION COSTING ABOUT 450 MILLION DOLLARS AT SEPTEMBER 1975 PRICES. DESPITE THE DIFFICULTIES IT WILL PRESENT AT THIS END, WE ARE ATTEMPTING TO PROVIDE A DETAILED REVISION OF THE COSTING BEFORE THE END OF OCTOBER, BUT SOME LOOSE ENDS MAY REMAIN. A FURTHER MINOR REVISION, WHICH NEED NOT AFFECT THE SUBSTANCE OF THE NEGOTIATIONS, MAY BE NECESSARY IN NOVEMBER/DECEMBER. THE REVISED COSTING WILL BE PRODUCED IN BOTH STERLING AND DOLLARS. WE ARE CONTENT FOR DOLLARS TO BE USED AS THE COMMON CURRENCY FOR FUTURE
DISCUSSIONS IN HONG KONG.
YOUR PARA 2
YOUR FOREWARNING IS APPRECIATED.
YOUR PARA 3.
THE FIGURE FOR CAPITAL WORKS REFERRED TO IN (A) IS OF COURSE £3M
AND WE CONSIDER THAT THE MINIMUM AND MAXIMUM FIGURES SHOULD BE AN
ANNUAL AVERAGE OF £2M AND £4M RESPECTIVELY. THESE FIGURES ASSUME
A 5 YEAR AGREEMENT. WE ARE SEPARATELY DISCUSSING WITH HQBF AND
REGIONAL HQ PSA HONG KONG CURRENT ESTIMATES OF WORKS MAINTENANCE
EXPENDITURE WHICH SHOW SIGNIFICANT INCREASES OVER EARLIER
FORECASTS. THE MAJOR ELEMENTS OF THE CAPITAL WORKS PROGRAMME
WILL DE:-
SECRET
/A. ALTERATIONS
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