TNAG-0544-FCO40-639-Strength-of-garrison-in-Hong-Kong-1975 — Page 6

IMMEDIATE

GPS 850

SECRET

KOD N

CYPHER/CAT A

2 1 NOV 1975

380

FM F C 0 201415Z

SECRET

11017122

368 ૧૪૬

TO IMMEDIATE HONG KONG TELNO 896 OF 20 NOVEMBER

YOUR TELNO 1144: DEFENCE COSTS.

1. YOUR PARA 2A. JONES LEFT YOUR SIDE A REVISED BREAKDOWN OF

COSTS AND THE RESULTS OF OUR EXAMINATION OF POSSIBLE FURTHER

ECONOMIES. SEE ALSO HQ BF'S LETTER OF 4 NOVEMBER. SINCE THEN COSTS

HAVE BEEN REDUCED TO HK DOLLARS 454 MILLION AFTER REASSESSING THE

COSTS OF NAVY PERSONNEL AND ARMY LEP. WE CANNOT YET SAY WHAT IS

NECESSARY TO REDUCE TO HK DOLLARS 450 MILLION, BUT THIS SHOULD BE

ACHIEVED BY NORMAL STAFF INSPECTIONS AND FINANCIAL SCUTINY COUPLED

WITH PROBABLE SAVINGS FROM THE HEADQUARTERS RELOCATION. HONG

KUNG'S FINANCIAL CONTRIBUTION WILL BE BASED ON THE ASSUMED FIGURE

OF HK DOLLARS 450 MILLION AND EVERY EFFORT WILL BE MADE TO GET

DOWN TO THIS FIGURE SOON. MOD ASSUME THAT YOU WILL BE CONTENT WITH

THIS AND THAT NO FURTHER JOINT WORK WILL BE NECESSARY. YOU WILL

OF COURSE BE KEPT CLOSELY IN TOUCH WITH HQBF'S CONTINUING

INTERNAL SEARCH FOR ECONOMIES AND INFORMED IF COSTS ARE BROUGHT

BELOW HK DOLLARS 450 MILLION.

2. YOUR PARA 2B. MOD AGREE THAT SUCH AN EXERCISE WOULD BE OF VALUE.

THE NEW MOU MAKES PROVISION FOR THIS. FOR PRESENTATIONAL REASONS, HOWEVER, A REVIEW SHOULD ACHIEVE WORTHWHILE RESULTS AND MOD

DO NOT BELIEVE THIS WOULD BE POSSIBLE IN THE TIMESCALE YOU SUGGEST.

REDUCING COSTS TO HK DOLLARS 450MILLION IS LIKELY TO LEAVE LITTLE

SCOPE FOR SIGNIFICANT FURTHER SAVING, ALTHOUGH MOD WILL OF COURSE LOOK CAREFULLY AT THE RELOCATION PLANS. SAVINGS ALREADY IDENTIFIED

TAKE ACCOUNT OF THE REDUCED FORCE LEVEL. BUT RECOGNISING YOUR

PRESENTATIONAL NEED, MOD PROPOSE THE FOLLOWING FORMULA FOR PUBLIC

USE:

THE COSTS HAVE BEEN RIGOROUSLY STUDIED BY BOTH SIDES AND

USEFUL SAVINGS MADE:

(11) BOTH SIDES HAVE AGREED ON THE IMPORTANCE OF ACHIEVING THE

MAXIMUM ECONOMIES IN RUNNING THE GARRISON AND HAVE MADE PROVISION

WHEREBY DURING THE PERIOD OF THE NEW AGREEMENT THE HONG KONG

GOVERNMENT MAY CALL FOR REPORTS AND SHARE IN ANY RESULTING SAVINGS: (1/1) HQBF WILL KEEP CLOSELY IN TOUCH WITH THE HONG KONG GOVERNMENT

SECRET

/TO ENSURE