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Defence
25. Following the 1975 Defence Review it was agreed between the UK and the Hong Kong Governments that the garrison in Hong Kong should consist of four infantry battalions, three Gurkha battalions and one British battalion, a (Gurkha) engineering squadron, five naval patrol craft and a squadron of RAF helicopters.
26. A new Defence Costs Agreement was concluded between the UK and Hong Kong Governments in December 1975 whereby the Hong Kong Government agreed to meet 50% of the cost of the garrison in the first year, 62% in the second year, and 75% in the third and succeeding years, the balance being found by the United Kingdom Government. The estimated cost of the garrison, at 1975 prices, is £42.5 millions. The Agreement, which came into force in April 1976, will run for seven years in the first instance and will be renewable for further periods of five years on the same terms unless either government wishes to vary them.
27. In announcing the Defence Costs Agreement to Parliament on 19 December, Mr William Rodgers, MP, then Minister of State for Defence, said:
"This Agreement is in the interest of both Governments.
For the United Kingdom it will provide a valuable contribution
to the defence budget and for Hong Kong the assurance of a continued British garrison".
Hong Kong & General Department Foreign & Commonwealth Office
September. 1977
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