UUD
GOVERNMENT HUUSE
HUNG KUNG
*91
b-14 14:21
PHGE ØS
CONFIDENTIAL
(c)
機密
As a variation of (a) above, MOD proposed in May 1991 that HKG buy out MOD's 25% interest in the vessels. MOD would formally relinquish ownership of the vessels which HKG would then man and operate (If it was thought necessary that the patrol craft fly the white ensign, this could be achieved through the use of an RN captain and loan service personnel.)
HKG was unable to accept this proposal because it creates a number of political, logistic and other difficulties. detailed in the Annex.
These are
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15.
(e)
In May 1990 HKG proposed to MOD that the HKG's share of the proceeds from the disposal of stores etc. purchased under the 1981, and possibly the 1988, DCA be increased from 65% to 75%, and that this be offset against an advance to MOD of its 35% share of the recurrent operating costs of the patrol craft between 1992 and 1997.
MOD indicated that the volume of cash likely to arise from the 1981 DCA would probably not be significant, and that they were unwilling to extend the arrangements proposed to the 1988 Agreement. Finance Committee would have to be advised of such arrangements if implemented.
In a letter to Sir Michael Quinlan in December 1990 the Governor suggested that arrangements might be devised under which payment of credits to MOD could be phased in such a way as to provide a significant overall benefit to MOD in terms of cash in hand.
Whilst this might be feasible in accounting terms, legal advice is that such
arrangements are not capable properly of adoption without disclosure to Finance Committee.
The HKG has also examined the feasibility of identifying tasks at present undertaken by the Garrison which might be excluded from the 65:35 DCA funding mechanism and treated as exceptional assistance which HKG
No comments yet.
Private notes are available after approval.