TNAG-0758-FCO40-962-Strength-of-UK-armed-forces-stationed-in-Hong-Kong-1978 — Page 97

CONFIDENTIAL # #

機密

For discussion

on 5th December 1978

Introduction

XCC(78)91

Copy No Page

187

of 40

ا

MEMORANDUM FOR EXECUTIVE COUNCILK 062/!

DEFENCE COSTS AGREEMENT; ROYAL NAVY PATROL CRAFT

Ka

A

In the autumn of 1975 during the discussions and negotiations leading up to the signing of the Defence Costs Agree- ment in London on 18th December 1975, consideration was given to the content of the Hong Kong Squadron and to the cost of refitting or replacing the RN ships which comprised it.

Content of RN Squadron

2

On 15th October 1975 the Executive Council advised and the Governor ordered that the Hong Kong Government should opt for the Royal Navy presence to comprise five patrol craft. A copy of a brief together with the relevant extract of Executive Council Note XCSI(75)3 of 9th October is attached at Annex A.

$12.

C.S. 166

Cost of the Garrison

3

For purposes of the DCA the cost of the garrison was based on an assessed cost drawn up by the Ministry of Defence, and examined by officials of the Hong Kong Government. At the time it was completed in November 1975 it was not possible to come to any authoritative conclusion either about the type or number of ships which would be needed to replace the existing 5 patrol craft their cost or the likely date by which expenditure would be incurred. Accordingly no provision was included in the assessed overall annual cost of the approved garrison of $450m to cover the replacement cost of the patrol craft.

4

Following the conclusion of the Defence Costs Agree- ment there was an exchange of letters between officials of MOD and of the HK Government in early 1976 regarding the replacement costs of the patrol craft in which it was agreed that the cost would be divided on the basis of the proportion of expenditure existing under the Defence Costs Agreement. Since 1st April 1978 the Hong Kong Government has borne 75% of the cost of the garrison. It has accordingly been agreed between officials that 75% of the cost of

CONFIDENTIAL

機密

s