CODE 18-77
27-OCT-1993 11:42
OED CROYDON
081 686 4851
P.07
27 October 1993
Mrs Barnes Jones
Hong Kong Dept WH3 12
Seel 99
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Yes.
Also lead
I
Reference..
Mr. Mom's
(104)
OETS have now replied to Mus D- B's minute (attached)
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I am attracted to the proposal in para 5. Has it been fanted with BC? (and are they fully
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HONG KONG CONSULATE-GENERAL: BRITISH COUNCIL CONTRIBUTION
1.
Please refer to your minute of 13 October to Mr Whittle which summarises the meeting on 28 September with the British Council.
2. As agreed at the meeting on 28 September OED and the British Council have discussed further the available information on ongoing costs. OED thought that agreement had been reached on an overall figure for annual running costs which would include an element for long term upkeep of the building i.e. major repairs/refurbishment. OED's overall estimated figure is about £500,000 which is roughly the same figure as quoted in Mr Gunesekara's letter to you of 8 October (copy attached for Mr Wootton and Mr Davey). However the British Council have obviously reached the figure via a different route from OED as they exclude estimated costs for long-term maintenance, repair of external fabric, external lighting, lift and escalator replacement and rates (if applicable NB rates are likely to be £140,000 approximately and were also not included in OED's calculations). OED consider that the latter items should be treated as ongoing expenses and down to the British Council - it is normal practice for Landlords to look to their tenants to pay rates and contribute their full share towards the long term upkeep of the building. (Mr Neate stated this at the meeting on 28 September). OED feel that Treasury will endorse our thinking.
3. We had considered retrieving the cost of these items from the "rent" but in the present case it is highly possible that any income from rent will go direct to the Treasury and subsequently the FCO would be left to meet the costs of long term maintenance etc. I have recently spoken to Mr Reading (on 25 Oct) who believes that the British Council will accept responsibility for the items in dispute provided the overall running and long term
"
maintenance/refurbishment costs and any "rent contribution do not exceed their current annual ongoing costs of about £800,000. Mr Reading and I both consider that we will be able to agree an estimated figure to cover all the items
PCAS4.207
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