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Wir Wootton's Dryt.
BRITISH COUNCIL: CO-LOCATION WITH BCG IN HONG KONG POST 1997
1. Background
1.1 The establishment of the BCG is specifically provided for in the Joint Declaration. HMG wished it to be a high-profile symbol of Britain's confidence in Hong Kong's future prosperity and stability and for this reason the decision was made to build a prestigious building that would accommodate a large British presence.
1.2 It was considered that the inclusion of the British Council within the building would enhance the overall symbolic effect of the building as well allow for the construction of a building of an appropriate size and stature. Following considerable consultation between the British Council, FCO (Hong Kong Department and OED) and the HKG it was concluded that there were no outstanding difficulties in co-location and it was agreed to go ahead on the basis that the Council would not be required to contribute a capital sum nor pay rent but would only be required to pay its share of running costs including ground rent. This was recommended to Ministers in November 1991.
2. Reasons for the agreement to co-locate without rent
2.1 The British Council will be in the new building mainly because of the political imperative of creating a significant British presence. Operationally it exposes the Council to some risk in its main activity, the teaching of English, which is highly sensitive to location and market. The teaching operation constitute about 80% of the Council space requirements.
2.2 The financial benefits of low ground rent is expected to be largely offset by the considerable increase in running costs of the new building and compound.
2.3 In addition the Council is having to bear the risk that the change of location might result in a loss of revenue from the English language teaching operation.
T
нко А06/2
07 JU 1993
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