TNAG-0543-FCO40-638-Strength-of-garrison-in-Hong-Kong-1975 — Page 7

1

46

720

300

214

SECRET UK EYES A

Subsequent exchanges have resulted in the Minister being

given discretion to settle for £25M in the first year,

rising to 75% in the second or third years if agreement

can be reached on this basis.

6. On the basis of the frigate option, the reduced

garrison.is estimated to cost HK 2468M in 1976/77.

Thus

our objective must be to secure a new agreement, on the

basis of a 43 units garrison, under which Hong Kong will

in 1976/77 pay 75% of this figure i.e. HK 8351M

contributions in subsequent years depending on the rate

of inflation. If Hong Kong prefer the patrol boat optinn

this figure becomes HK $347M. As a fall-back position we

can settle for HK 8264M (£25M) in the first year rising

to HK $351M (or HK $347M) in the second or third years.

7. Any further concession would require reference to

London and although a minor variation might be authorised

by telegram a major change will probably necessitate a

return to London and a DOPC meeting. An alternative formula

starting at a lower point but rising above 75% in the later

years of the agreement might well be acceptable to Ministers.

༢་

SECRET

-24-

UK EYES A