68
66
14
see (66) 68X74
fie
ths BJ.
Mr Morris
please oju 15/9
MIST
9/9
langenseful for his, and way y for Ro
you have approached bon
am
Reference
HUD 406/2
182
RECEIVER IN RE
josue.
J9/9
TY
-9 SEP 1993
REGISTRY Action Takan
DESK OFFICER
INDEX
PA
FUTURE CONSULATE GENERAL: TERMS FOR BRITISH COUNCIL
ACCOMMODATION
1.
You may like to be brought up to date on this. Briefly, Mr Hum has undertaken to talk to his opposite number at the British Council to explain the dictates of the Treasury - that the Council must pay rent for its accommodation in the new building.
2.
You will recall that the Treasury wrote to RFD (Mr Marr's letter of 22 July to Mr Wootton) expressing surprise that the British Council would not be contributing to the capital costs of their new accommodation in Hong Kong either directly or through rent. The Treasury asked us to review this matter and pointed out that failure to charge rent to the British Council would amount to a subsidy effectively increasing their grant in aid allowing the British Council an unfair advantage in the supply of its non-grant in aid services (teaching English). CRD wrote to the British Council (Mr Magor's letter of 27 July to Mr Gunesekera) explaining the Treasury's reservations at learning that the British Council would not be paying rent and asking the British Council to let us have a breakdown of their current costs in Hong Kong (rent and running costs for the existing building). Mr Gunesekera (his letter to Mr Magor of 9 August) gave the total annual rent and running costs of the British Council's present premises as £805,730 and estimated running costs in the new building at £793,980 (including "additional ancillary staff" which he argued would be needed because "the new building does have twice the floor space of our present one" a point not accepted by OED). OED, however, estimate British Council costs (ground rent, air conditioning, utilities and maintenance) at £131,720 per annum. The OED figures were based on the 1992 operation and maintenance costs for 1 Pacific Place (as you know, one of the newer and most prestigious buildings in Hong Kong and near to the site of our own new building). CRD has since requested (on 13 August) from the British Council a breakdown of the running costs for the new building; no response yet.
3.
I met with representatives from OED, CRD and RFD on 7 September to discuss what to do next. I had asked the Departments involved to go through back papers one last time looking for papers which might demonstrate that the PES bid was indeed a joint one. We had all drawn a blank. My own preference had been to attempt to demonstrate to the Treasury that the British Council should use the building rent free, since this was the understanding which has all along been the basis for their involvement in the project. But we agreed round the table that we could not succeed in putting together an argument along these lines which would convince the
}
min.terms.NAT
JEB
CODE 18-77