TNAG-0937-FCO40-1156-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1980 — Page 142

CONFIDENTIAL

Scales Review Team Report

Pokhara/

Kathmandu

Transit

Facilities

MOD explained that this report formed part of a world-wide scaling review.

Mod pointed out that the proposed facilities at Pokhara were connected with the enlargement of the Garrison; the facilities at Kathmandu would need rebuilding in any case.

13. HKG questioned the increased costs ensuing from a 15% increase in Wessex flying hours. MOD explained that the increase was in large part due to higher flying hours generating a greater servicing "requir ment. The extent of the increase would in any case be subject to detailed establishment action. HKG also questioned the redeployment costs, and MOD explained that they stemmed largely from the need to provide additional transport for civilian industrial personnel.

Implications of the New Costing

14.

HKG said that the costs ensuing from enlargement were small in relation to the additional costs revealed in the 1979/80 Costing. For purposes of comparison, they assessed that the 1979/80 Costing plus enlargement would give a total cost of £177M in 1981/82 rising to £206M in 1982/83, whereas the existing DCA totals £60M in 1979/80 and would total £68M in 1980/81. HKG defence spending was likely to double as a proportion of the Hong Kong Budget. MOD pointed out that Hong Kong's defence expenditure as a proportion of GNP was low in relation to Britain's, and this comparison could not be ignored in this context. HKG accepted that the 1979/80 Costing was comprehensive than the estimate made in 1975, but expressed concern at the size of the difference between the resulting figures. MOD explained that the difference resulted from:

a.

b.

the DCA inflators proving inadequate;

more.

shortfalls in the estimates made in 1975, particularly in respect of movement and equipment costs (which are among the more difficult items to forecast);

C. DCA.

the inclusion of additional items not covered in the 1975

Detailed comparison of the two sets of figures was difficult as the coverage of each heading was different. MOD stressed the importance of demonstrating that the shortcomings of the 1975 DCA were to be remedied.

Future Works programme

15. The HQBF schedule of future works was scrutinised to identify items derived from the existing DCA, items ensuing from garrison enlargement, items which represented an improvement in conditions, items agreed under the existing reprovisioning programme,and other works. HKG took note of the future works programme subject to

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CONFIDENTIAL