TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 119

CONFIDENTIAL

28

Pa

MsMgroJey Mr-stone 8/6 W/%

Jo Paul

Me Burks KAY / M

Mr

FROM:

A R Paul

Hong Kong Department

DATE:

7 June 1990

HKC OG 2

CC:

Mr McLaren

CCEIVE!

Y

HONG KONG: ROYAL NAVAL PRESENCE AFLOAT

13 JUN 1990

OFFICE

14/6

1. You asked me where matters now stood on this.

2. We have spoken to the relevant part of the Hong Kong

Government. They have just finalised their response to the

MOD, which they expect to issue in a few days. It will

explain why Hong Kong cannot accept the MOD's proposal for

dealing with the financing problem. But it will put forward

alternative proposals designed to be helpful. It will, as I

understand it, focus on Hong Kong paying more initially, and

getting a larger share of the proceeds of the sale of stores

later.

3.

It is difficult to judge whether this is likely to

resolve this matter. But we shall be receiving a copy of

the Hong Kong Government's response. At this point, I fear we are going to have to take a rather closer interest in the negotiations than hitherto. This could have the makings of

a major row. But with careful handling, this should be

avoidable.

ARPanc

MOPACA/1

A R Paul

CONFIDENTIAL