TNAG-2240-FCO40-3219-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 7

CODE 18-77

Mr Dew

RMD

CONFIDENTIAL

Reference.

File

191

HKB CE3/1

FUTURE ROYAL NAVAL PRESENCE IN HONG KONG

1.

190

Thank you for your minute of 3 December. I have talked with Martin Howard in SEC(O) (C) to find out the situation. This is, as you had surmised, that the MOD have indeed secured additional funding from the Treasury for the patrol craft and expect this to continue in subsequent years. Apparently the rather strange phrasing of the PS Defence Secretary letter was to take account of Treasury sensitivity.

2. I think, fortunately, this issue has been resolved. Unfortunately, the 1991 review of the garrison withdrawal plan could lead to further arguments about who pays for what parts of the garrison. The section on finance in the review leaves it open for the MOD to confirm with the Hong Kong Government bit by bit which parts of the garrison may fall within the DCA and may fall without it. One hopes that the MOD are not going to take this as an opportunity to argue about individual items, but if past history is anything to go by we cannot be sanguine.

Milustare

M V Stone

Hong Kong Department

WH 304

270 2651

6 December 1991

cc: Mr Muir

Mr Grant, Finance Deptartment Mr Dowse, NPDD

MVSAAG

CONFIDENTIAL