TNAG-2676-FCO40-3873-Hong-Kong-garrison-withdrawal-plan-1993 — Page 133

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13. The Hong Kong government will benefit significantly from these proposals as a result of having to pay 65% of the costs of a sharply reduced garrison. Initial calculations indicate that

this would generate savings for them on manpower costs alone of

£3.7m in 1993/4, £9.4m in 1994/5 and £55.7m in 1995/6, compared

with current estimates (which already show a decline from year

to year).

14. For HMG there would be savings from reductions in military

infrastructure in Hong Kong and the release of locally employed

and enlisted personnel However, to the extent that personnel and units are redeployed rather than disbanded,

than disbanded, MOD would lose

receipts from the Hong Kong government. [Illustratively, the early withdrawal of the UK battalion will result in receipts

foregone to the defence budget, on manpower cost alone, of £6.6m in 1994/5, fllm in each of 1995/6 and 1996/7, and about £3m in

1997/8.] It would also be necessary

necessary to spend some money on accommodation and running costs for the returning battalion and

other units. This could amount to £14m, spread over the years

1993/4 to 1995/6. [Overall, assuming the broad programme of

reduction set out in paragraph 7 and that additional non-manpower cost would be broadly offset by actual savings achieved in Hong

Kong, the additional cost to MOD, compared with current plans, would very roughly be £10m in 1993/4, £18m in 1994/5, £15m in

1995/6 and fllm in 1996/7.] These additional costs are unwelcome, but a proportion at least could be incurred in any case if the

Governor were unable to secure LEGCO support for meeting the Hong

Kong government's share of a larger garrison's costs. Such a financial penalty could also be accompanied by a constitutional

row over what would be a public breach of a formal agreement reached between HMG and the Hong Kong government.

Conclusion and recommendation

15.

There are military and political risks and financial penalties associated with a more rapid run down of Hong Kong to

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