Camp Page, approximately 42 kilometers from the DMZ, houses the 4th US Army Missile Command, Hq & Hq 7th Bn, 5th Artillery (HAWK), and several smaller tenant units; provides engineer support to seven smaller Army facilities in the Chuncohn area; operates and maintains a key Army airfield. 4th Missile Command provides long range artillery and missile support to 1st ROK Army. Support to the US Army is limited to: (a) Post and area command and administration, (b) Supervision of civilian contractor support activities, (c) Maintenance of a US Army airfield. The command was established 18 April 1958. [Deleted.] Unit occupies an established installation which is an Army railhead and communications center. [Deleted] is approximately [deleted] kilometers from the Demarkation Line. There are [deleted] American military personnel and [deleted] Korean augmentation to US Army (KATUSA) personnel assigned. [Deleted.]

The US military POL Pipeline planned for the southern portion of the Republic of Korea will be a 255 mile long, welded, high pressure, direct burial, [deleted] diameter pipeline from Pohang to Osan, [deleted] from Osan to Seoul and will have four turbine driven pump stations located at Pohang, Weagwan, Taejon, and Pyongtaek. The design throughput capacity of the system is [deleted] barrels per day (BPD) to Weagwan, and [deleted] BPD to Seoul, POL storage along the line will total [deleted] barrels are existing in protected storage. Operations analysis indicated the susceptibility of a surface pipeline to guerrilla and sabotage action. Accordingly, the decision was made to go underground, supported by an architect-engineer study which indicated comparable costs for above or below ground construction.

Requirements for pipeline delivery were recognized during the Korean conflict when assault pipelines augmented a totally inadequate rail and highway delivery system. Assault pipelines were dismantled after the Korean Armistice, when peace-time requirements could be met with rail and road systems. Introduction

of new equipment and weapons systems have steadily increased military petroleum requirements. Studies of capability versus requirements in 1968 revealed that the petroleum distribution system in being in the Republic of Korea would not support military requirements, in the event of renewed hostilities. The immediate need for a pipeline distribution system readily available for military use precluded awaiting the natural economic growth of the Korean petroleum industry and its distribution capability. With no substantial interest shown in early construction by commercial oil companies, a decision was made to build the pipeline; petroleum requirements of committed forces could not be met in event of hostilities.

The Trans-Korea pipeline was included in the FY 68 Supplemental Military Construction Program for Korea and was authorized by PL 90-392. Funding was included in the FY 68 appropriation. The operation of the pipeline will be financed with annual Army operation and maintenance funds (O&MA). During peace-time the US military will use approximately [deleted] barrels per day of the total capacity of [deleted] barrels per day. The [deleted] barrels of US-owned product will be delivered to US and ROK military installations. The product delivered to ROK forces through the pipeline will be MAP supported. The cost to construct and operate the pipeline is as follows:

CONSTRUCTION

Current working estimate is $23.4 million. This included 255 miles of pipeline, submarine terminal off-loading line at Pohang, [deleted] barrels of underground storage, four pumping stations, and a cable communication system.

OPERATIONS

Estimated operating and maintenance costs for pipeline operations are $1,544,595 per year. This figure includes cost of military and civilian labor, utilities, supplies, transportation, and maintenance service contract.

The pipeline will be operated by an organization of Eighth US Army, the Petroleum Distribution System, Korea. This organization will operate all wholesale petroleum distribution facilities in Korea. It is expected that a proportion of the annual $1,544,595 operating and maintenance costs per year can be off-set by commercial utilization. There will be a peace-time capacity excess to military needs. Commercial oil companies are interested in using this excess capacity on a reimbursable basis. The Eighth Army is presently negotiating with the domestic commercial oil companies for the use of excess capacity of the pipeline. Negotiations are still in progress. The cost to non-US users will be negotiated by EUSA with potential users under the authority of Section 2776, Title 10, U.S. Code. The minimum cost to any non-US user will be a proportionate share of the yearly interest and amortization costs for those facilities used.

There are [deleted] short tons of ammunition presently stored in [deleted] near Pusan; [deleted.]

The facility is not located in a valley surrounded by mountains. It is located in hilly terrain and a portion of the storage location is protected by the surrounding hills. The center of the storage facility is 3,400 feet from the coast with the nearest storage location being 2,400 feet from the coast. Farming is conducted within the perimeter of the facility by Koreans who reside within and adjacent to the depot. Security for the entire facility is provided by contract Korean National Security guards, roving and stationary, under US supervision. Theft and Pilferage

The gross dollar value of theft and pilferage from American facilities of government, post exchange and personal property for CY 68 was $1.299.580. The recovered property was valued at $467,827, resulting in a net loss of $831,753. The dollar value of the same losses for CY 69 was $1,466,096. The recovered property was valued at $593,430, resulting in a net loss of $852,666.

Actions underway, or newly organized, to combat theft/pilferage loss to United Forces Materiel in the Republic of Korea include:

a. Crime prevention surveys of special category facilities, such as banks, exchanges and finance facilities. The surveys provide information concerning security measures required to safeguard against theft and pilferage and are conducted annually or as required through analysis of trends.

b. Physical security surveys are conducted of each installation to provide information to responsible commanders on safeguarding their installations and sites from theft, infiltration and sabotage. Surveys are conducted annually.

c. Procedures have been developed and approved by the US-ROK SOFA Joint Committee for combating blackmarketing and illegal diversion of US material in all categories (military, PX and commissary). The Joint Committee approved establishment of US-ROK Joint investigative teams in late 1967. In addition, the ROK Government has formed a ROK Joint Anti-Smuggling Control Committee composed of Korean National Police, ROK customs and ROK Central Intelligence Agency personnel in an effort to reduce blackmarketing activities. Joint investigative teams throughout Korea have proven to be effective in reducing illicit transactions. Efficiency is steadily improving in the identification and apprehension of violators, both US and ROK.

d. The Joint US-ROK efforts to reduce blackmarketing activities only supplement extensive efforts within the USFK. A committee has been formed to make recommendations for preventing blackmarketing activity. The committee is composed of representatives of COMUSFK, component commanders, and selected major subordinate commanders to review existing control procedures and makes specific recommendations for improvements. Its actions have resulted in increased control over the military supply system, commissaries, PX's, field ration and open messes. The committee recently conducted a study of rationing of PX goods and recommended a new rationing system with improved controls. The new rationing system became effective 1 January 1970.

e. On 13 October 1969, a permanent Supply Diversion Team composed of CID personnel, Korean investigators and supply specialists was organized. The mission of the team is: Investigate cases of supply diversion on a Korea-wide basis, conduct surveys on all facilities handling supplies and make recommendations as to how the supply system can be best secured, and maintain a central file on all lost, stolen or recovered US government property to include the subjects and complainants.

As of 31 January 1970, the Supply Diversion Team has recovered over $140,000 worth of US government property through its investigative efforts.

f. Joint ROK-US Military Police Customs Investigations teams have been organized to observe and detect local national and US personnel who violate ROK customs laws in the acquisition of controlled items of US goods.

g. A close working relationship is maintained between PM, Eighth Army and ROK enforcement agencies. In the area of blackmarketing coordination is maintained with the ROK Joint Anti-Smuggling Team and the Foreign-made Goods section of the Korean National Police.

h. As a result of recommendations of the temporary supply diversion team in late 1968, a review team was established at the Inventory Management Center in Taegu, Korea, with a mission to review all requisitions and determine which are suspect. A check is then made with the originator to determine if in fact they submitted the requisition.

i. All purchases of dollar instruments at APO's post exchanges or military banking facilities are recorded on a USFK Form 43. The forms are sent to the USFK Comptroller, who forwards a copy of all forms showing a purchase of $100 or more is recorded and the list distributed to each sub-command provost marshal. j. Individuals are required to register with area provost marshal's at the time of purchase, all TV's, refrigerators and other major appliances. All Army personnel, 06 and below, are required to clear with the area provost marshal prior to departure from the command and to show evidence of legal disposition of all major items purchased from the post exchange.

k. Recently the Provost Marshal, Eighth Army, requested through the Korean Supreme Prosecutor's offices that a joint effort be initiated to investigate POL diversion. Investigators from Eighth Army CID and the prosecutors office, through the aid of informants, began surveillance of drop-off points specially constructed for the diversion of POL. This surveillance resulting in the largest POL diversion effort ever uncovered in the Seoul area. The team will operate in other sections of Korea in the near future.

Military assistance program

The objectives of the USG military programs are to maintain sufficiently strong Korean forces, in conjunction with US Forces as required, to resist aggres

sion; to assist in developing a viable economy and social structure; [deleted] to support deployment of ROK forces to Vietnam. These objectives must be considered in light of the North Korean threat, both overt and covert, and the ChiCom reinforcement capabilities. During the past three years, some MAP reorientations have been necessary to counter NK infiltrations. The ROK forces are well trained, equipped with aging equipment and, at present, are capable, with US assistance, of defending and containing a NK attack. Defense against a NK attack, reinforced by the ChiComs could be sustained for only a short time by the ROK forces. The recent MAP cuts will have a serious adverse impact on this capability.

The mutually agreed-to force level for the ROK Armed Forces is [deleted] which was established pursuant to paragraph la of Revised Appendix B to the Agreed Minute of November 17, 1954, and which has remained unchanged since it was agreed to in 1960.

The following figures are the Military Assistance Programs for the Republic of Korea, Fiscal Years 1966 through 1970, and the projected program for Fiscal year 1971:

[In millions of dollars]

The relationship of U.S. assistance to the total Republic of Korea defense budget is:

REPUBLIC OF KOREA

The ROKG provides uniforms for the Korean military in Korea; however, the MAP provides raw material, such as wool, cattlehide and rubber. The ROKG provides raw cotton, and processess all raw materials into the required items, using ROKG specifications. Quality meets these standards but is lower than U. S. standards. Cost of providing raw material during FY 70 was $4.338,649. Major items of excess military equipment provided are shown below with a "utility value" by fiscal year. Since the market for military equipment is limited, it is difficult to assign a fair market value. Therefore, a factor of approximately 30% of acquisition cost has been used in computing "utility value" of excess items made available to ROK forces.

Source of funds for all purchasers except five helicopters was the Won Defense budget. Five UH-1H Helicopters were purchased by funds contributed by ROK citizens, organizations and corporations.

The MAP Transfer Program is a plan which provides for the phased transfer of funding responsibilities for commercial consumables, used by ROK Forces and available in Korea, from the MAP to the ROK Won Defense Budget. Our objectives are to transfer all consumables manufactured in Korea to the Won budget as the MAP dollar can be used for investment items. The original program of $76.0 million was initiated through Country Team action with both ROK and USG agreeing. The Country Team was in agreement as to the propriety of suspending the MAP Transfer Program in 1966. There is military membership from the MAAG on the Country Team. Commercial consumables with an annual value of $18.5 million were transferred to ROK responsibility in 1960-61. The program was suspended in 1962 and 1963 for economic and political reasons and resumed on 1964-65, during which time $7.9 million was transferred to ROKG. In 1966 the program was suspended again, pursuant to the Brown Memorandum, "for as long as the ROK maintains substantial forces, i.e., at least two divisions in Vietnam." Items valued at $26.4 million annually were transferred prior to