RESTRICTED
MANAGEMENT IN CONFIDENCE
ROUTINE
2. We have asked Swires to pass you copies of Widnell's Cost
Plans (estimates). The first of these (GP1) did indeed estimate
the project cost about 43 m pounds. You will recall that when
Newey wrote to you on 30 November, he did indicate to you a
problem with unacceptably priced estimates. Whittle was right
not/not to sound any alarm bells when he visited in early
December. Because the original estimates were so far away from
reality as to be meaningless, we did not inform you of them in
their raw state, but worked to amend and refine them, putting
them into usable form before presentation in London and Hong
Kong.
3.
Widnell's Cost Plan no.1 (CP1) was unrealistic largely
because it was based on finishes and specifications well beyond
what we would expect to be delivered even for a good quality
building of the type which we all agree the Consulate-General
will be. Widnell's were giving us a quote Sultan of Brunei
building unquote, down to marble finishes throughout floor to
ceiling on internal walls (exclam) throughout and gold plated
door handles. A further reason for not volunteering the cost
plans at an earlier stage is that they are not user-friendly
but are, you will see, technical documents which do not lend
themselves easily to interpretation by the layman. We are faxing
you extracts from CP1 and CP2, giving the key comparisons between
Widnell's initial and revised estimates. These best illustrate
how we went about cutting the estimates without affecting the
quality and why the latest Cost Plan does not represent any
change to the SOR.
4. Some of the cost reductions were made by setting standards at
a more realistic level and others by refinements to the design
plan (NB without changing the SOR). For instance, CP1 estimated
site preparation at about 52 m HKD, while CP2 estimates it at
under 21 m HKD. The saving was made by adjusting the location of
the