CONFIDENTIAL
'
D/151/303/10/9
COST OF THE PROPOSED HONG KONG GARRISON
1.
The cost of the proposed Hong Kong garrison (Naval presence, 4 army teeth arm units a helicopter squadron and support) has now been revised to reflect the latest state of planning and converted to Sept 75 prices (the price base for 1976/7 estimates).
2. The revised costs are as follows:
£m
HK Sm
Navy
3.1
Army
30.6
325
Air Force
2.1
Works Services
5.5
Air Trooping
2.3
2 2 2 2
43.6
463
=
The average September market exchange rate of £1 HK 3 10.55 has been used to convert from sterling to dollars.
3. The detailed make up of the costs is described in the following annexes.
4.
Annex A Breakdown of Budgetary Costs Navy.
11
11
11
11
##
11
11
Army. Air Force.
Annex B Annex C Annex D Breakdown of Costs into Inflator Categories.
Real changes from the £33m garrison are as follows:
As
The revised costing assumes that the 5 patrol craft solution is adopted. However no provision is made in the costing for replacement craft. If expenditure has to be incurred on new vessels during the term of the new agreement we would expect costs to be shared on the same basis as is agreed for the remainder of the garrison.
b.
Excluding refit costs, the running costs of the frigate and patrol craft options are the same. The higher operating costs of the frigate being offset by higher base costs for the patrol craft, The cost of a frigate refit is estimated at about £1m in Hong Kong and about £24m in Chatham. If the frigate solution is adopted, annual costs will need to be increased between £0.2m and £0.5m.
C.
Army equipment cists nov exclude CLANSMAN radios which are not now assumed to come into service until after 1980/81.
d.
The cost of works services in Nepal, erroneously omitted from the earlier
1 costing have now been included, but Nepal costs have been reduced by to take
5 account of Gurkhas stationed outside Hong Kong.
CONFIDENTIAL.
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