TNAG-0544-FCO40-639-Strength-of-garrison-in-Hong-Kong-1975 — Page 130

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5 NOV 1975

TAKK 10/1

MINISTRY OF DEFENCE

SECRET UK EYES A

MO 5/14

PRIME MINISTER

Copy No.3..of.

·

WHITEHALL LONDON SW1A 2HB

TELEPHONE 01-930 7022

328

HONG KONG DEFENCE AGREEMENT

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On 30th October you agreed, subject to certain provisos, that the Minister of State for Defence should be authorised to attempt a settlement of Hong Kong's future contribution to the cost of the garrison on the lines recommended in my minute of 29th October.

2. The Heads of Agreement at Annex. A were initialled in Hong Kong on 1st November by the Minister of State and the Governor of Hong Kong. In outline they provide for:-

3.

a.

An agreement of five or seven years based on the reduced garrison as approved by OPD on 14th July, except that the naval frigate will be replaced by five patrol craft.

b. Hong Kong's contribution to the cost of the garrison to be as outlined in my minute of 29th October - i.e. 50% in 1976/77 rising to 62% in 1977/78 and 75% thereafter.

C. Hong Kong's increased contribution to be linked to the release by HMG for civil use of land at RAF Kai Tak and Victoria Barracks, subject to the reprovision elsewhere of essential facilities by the Hong Kong Government.

The details of the agreement are to be embodied in a Memorandum of Understanding, which among other things will include a formula for the adjustment of costs in the light of inflation and changes in currency exchange rates. Further work is to be done in a number of areas listed in the Annex to the Heads of Agreement including an examination of possible economies in support costs. A joint working party is to be set up urgently to examine the arrangements for the release of land at Kai Tak and Victoria Barracks.

SECRET UK EYES A

14.