Build new Offices (all Consulate-General
and British Council) and
7 UK staff flats
NPV £34.3m
Appendix A
Lease new Offices (Consulate-General and British Council) and
7 UK staff flats
NPV £75.4m
Appendix B
4. We have carried out a further risk analysis of the project and conclude that those identified in para 8 of my letter of 7 June will continue to be the main risks.
5.
Our Ministers have accepted our proposed course of action to proceed with the project at a total estimate cost within £29.0 million. I should be grateful for your agreement to proceed as soon as possible. Time is important in order to keep to programme for occupation by 1 July 1996.
6.
Para 7 of your letter under reference asked us to explore the scope for phasing the development and whether that would have a favourable bearing on the economics/costs of the project. The works have already been phased to bring forward the demolition, site formation and foundation contracts prior to completion of the detailed design of the superstructure. This has allowed us to speed up the programme and thereby take advantage of the present competitive market in the construction industry in Hong Kong. There is little further scope for phasing the project without delaying the eventual completion and risking escalating construction costs. It is an important political objective for HMG that the Consulate-General should be up and running well before the transfer of sovereignty on 1 July 1997.
7.
Para 8 of your letter under reference requested information on how this project will be managed on the ground in Hong Kong from our position as client. Our Project Manager, Swire Properties Projects Ltd, are a well established and experienced project management company based in Hong Kong. They have been given delegated authority for the majority of the PM activities indicated in Annex 3 of PCPU Guidance 33. Swire are obliged to report regularly on progress and to anticipate and notify the Project Sponsor, at an early date, of any possible difficulties with recommendations for any necessary remedial action to rectify the situation. We have an effective working relationship with Swire: we frequently have daily contact via the telephone or fax and I have also visited Hong Kong for discussions with them and the
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