7.
CO CONFIDENTIAL
I think it would be preferable for such discussions to take place
in London; this would enable us to field all our experts to present
the results of their studies.
4.
There remain two points concerning costs. The 5 patrol craft
NST solution assumes that craft capable of meeting the requirements
(set out in the accompanying Annex) will cost between £M3 and £4
each (or a total of between £M15 and £M20). We would expect more
precise indications of cost to emerge from the Craft Study. Secondly,
the way in which costs would be shared between the Hong Kong Government
and the Ministry of Defence rests on the correspondence culminating
in Robert Andrew's letter AUS(GS)91/76 of 23 February 1976 to you.
Thus 75% of the capital costs of the new vessels (including R&D,
design work and overseeing, and of any infrastructure required in
Hong Kong for their support) would be paid by the Hong Kong Government
irrespective of the financial provisions of a successor to the present
DCA and that you would also continue to pay 75% of the running and
support costs of the Squadron. I take it that this is also your
J
understanding.
5.
We will continue to inform you of progress, and look forward to
explaining our proposals to you in detail in London about late-May.
J
2.
COCO
CONFIDENTIAL
TIAL
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