RESTRICTED
MANAGEMENT IN CONFIDENCE
ROUTINE
persuasive arguments that exchange rate costs should be covered.
As explained in first TUR, we are less confident about securing
new money.
Indeed we have been forced to concude that it will be
extremely difficult to get any/any extra money out of the
Treasury.
7. The conundrum is that in objective terms (and Swires have
confirmed this), to be able to construct a prestige building of
the quality of our chosen design at this cost represents excellent value for money. Bouyed by this knowledge we admit
that we allowed ourselves to be over optimistic about the
problems of extracting the extra money which would be needed from
the Treasury. As the implications of the punishing Autumn PES
round filtered through, it became increasingly apparent that
there was a bullet to be bitten. There are doubtless lessons to
be learnt from the problems which we now face in getting from a
PES (start underling) estimate (stop underlining) pre-design
stage to sufficient PES funds in our hands to build the refined
project.
8.
You ask (your paragraph 7) about what further cost savings
may accrue without significant changes to the SOR. Such savings
are of a minor nature (in percentage terms) but may well accrue
with very tight control as the design is refined. We will seek
to do this and will keep you informed. (But it is well to
remember that estimating is not an exact science and estimates do
vary as design develops, and that market conditions on the day
will dictate the outcome of the tender process).
9. On your paragraph 10 (a). Draft Minutes of the latest
Steering Committee are now being cleared. I confirm that these
(and papers for and minutes of any future meetings) will be sent
to you as a matter of course.
10.