TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 124

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Mr Burns

The Mode

ECEIVED IN GEOISTRY

For M@Dread HKC! _76 JUN 1990

FROM: A R Paul

RA'D

Hong Kong Department

DATE:

7 June 1990

Corlo

have men a high level

CC:

Mr McLaren

Mr Stone

HONG KONG: ROYAL NAVAL PRESENCE AFLOAT

Surely Mr McLaren

dors mear

мого?

1.

You asked me where matters now stood on this.

x

11

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