CONFIDENTIAL
USK
ML
the SVA. It may be possible to suggest that since the Americans want us to accept 10 NSS as a means of securing NSS in the Soviet Union, they could contribute to the cost by letting us have the equipment free, and possibly even by contributing to installation costs as well. 16.
We need to discuss with the Americans the basis of cost sharing in the SVA and to see whether they are willing to help us. Actual costs of NSS will be significantly affected by factors yet to be settled in the negotiations such as the precise nature of the installations, the necessar data communications facilities and location. On the assumptions that the Americans will not accept a reduction in equipment quality much below what they have proposed in the negotiations, and US equipment is used, the initial cost of each station, including installation, could be up to £2 million. But satellite communication from NSS in the Pacific area (affecting South Georgia among the locations suggested above) would be impossible unless another communications satellite were launched. A major part of the cost would consist of transportation and access to the sites, which would vary widely according to the degree of isolation and environmental adversity of each location. best estimate at this stage is that the capital cost of 10 NSS would be of the order of £10-20 million and the running costs some £2-3 million a year. We envisage that the capital costs would be spread over at least 2 years beginning at the treaty's entry into force. Running costs would not arise until the third year of the treaty.
If we can secure favourable cost sharing provisions in the SVA or American financial assistance, the cost to the UK of accepting NSS will of course be lower than these figures.
Our
17. There appear to the 3 budgetary options for finding funds for HMG's financial contribution:
(a)
(b)
흐흐
(c)
FCO within existing ceilings. The possible_ sums required are very high in relation to the FCO's total annual programme budget. There is no possibility of the FCO finding these sums from savings;
MOD within existing ceilings.
contribute];
[MOD to
Contingency Reserve a claim in aid of the
defence budget.
Dd 427265 250M 5/77 905275
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