would assess a claim.
by the consultants.
6.
The base prices at the time of tender were verified
In the circumstances of the case it was very difficult
to determine the rate of price increases that might have taken place if the
circumstances which gave rise to the ex-gratia settlement had not occurred.
The base prices submitted by the contractors were the subject of detailed
discussions between representatives of the Government and the consultants.
Having been found reasonable, they were incorporated in the supplemental
agreement.
18.
The Director of Water Supplies will be providing the Director
of Audit with further information on the inclusion in the supplemental
agreement of the specific item referred to in paragraph 42. As regards
the inclusion of a rate of interest in the supplemental agreement, it
was considered that this was covered by the criterion agreed by Finance
Committee that settlement would be on the same basis as the consultants
would assess a claim, but it is accepted that the submission to Finance
Committee could have been more explicit on this particular point.
Faragraphs 43 - 46: Head 71 - Public Works Non-recurrent: Buildings,
19.
Subhead 827 Repairs and refurbishing at Homestead Flats
When the "Homestead" block of flats was severely damaged in
August 1971 a decision had to be taken quickly, against the background
of an acute shortage of quarters at that time, on whether they should
be refurbished for retention in the long term or whether they should
be demolished and reprovisioned. A financial evaluation of the alternatives
could, therefore, only be undertaken on the basis of rough orders of cost.
It is very disturbing that the final cost of refurbishment was three times
the original estimate but it was explained to Finance Committee that
normal tender action would only have revealed the fallibility of the
estimate to the extent that the tender documents specified the work.
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