CONFIDENTIAL UK EYES A
FUTURE OF THE HONG KONG PATROL CRAFT
Points to make:
Understand that financial arrangements for retention of
patrol craft post-1992 have not yet been settled with MOD.
You will appreciate increasing pressure on defence
budget. Seriously believe that if MOD is unable to reach satisfactory agreement on costs, it will reconsider the whole question of the craft's retention.
Fortunately, understand that MOD and HKG may be close to
agreement, on basis of discussions between officials in May.
Hope that this is the case.
Background:
1. MOD Ministers have agreed that the three remaining
Peacock-class patrol craft should be retained in Hong Kong
until 1997, subject to a satisfactory financial arrangement
being reached with the Hong Kong Government to cover the
period after 1992 (when the patrol craft were originally scheduled to be withdrawn). MOD believes that the case for
craft's retention is essentially political rather than
military, based on their role as a statement of HMG's
continued commitment to the territory at a time of fragile
local confidence.
2. Following discussions in May between MOD and HKG
officials in Hong Kong, it was thought that the basis of an
agreement had been achieved, whereby HKG would pay 100% of the craft's operating costs from March 1992. As a quid pro quo, HKG would receive an larger proportion (than allowed under the current DCA) of the value of garrison stores disposed of or
CONFIDENTIAL UK EYES A
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