COVERING CONFIDENTIAL
142
Mr Muir
From:
M HR Bertram, OED
HKD 406/1
Date:
HONG KONG CONSULATE-GENERAL
CC:
2 September 1992
Mr Hum
Mr Griffiths,
Finance Dept
Mr Brown, Finance Dept Mr Chase, RMD
Mr Morris, HKD
parola Myin's off.
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Mr. Morris
1. Rather late (and I apologise) I am replying to your minute of 24 July 1992 to Don Brown (copy attached) about investment appraisals for the proposed building.
2.
The main appraisals and comparisons were done in the late 1980s. FCO Ministers and the then Prime Minister had by that time concluded that Britain should co-locate in one substantial building its official representation in Hong Kong (i.e. the Consulate-General functions (including the rump of the JLG), the British Council, and the Immigration and Passport functions (at present the responsibility of HKG) ). The question then became whether to buy a building that would suit, buy and convert a building, lease a building or acquire a site and build on it. These options were all pursued during 1989, and a report commissioned from Richard Ellis. This was followed up in detail during a visit to Hong Kong by the Deputy Chief Clerk and the Heads of HKD and OED. There was no shortage of proposals from major Hong Kong development companies, including joint ventures with HMG, but the conclusion was that the options would all cost in the £70-100m range. FCO Ministers then resolved to bring renewed pressure on HKG to yield up a site on preferential terms. There followed a long haggle, during which several sites were considered, and the Chinese (who would be forgoing half the value of the discount) squared. The result was HKG's offer of the Colvin House site at no cost: HMG accepted.
He
3. All this was summarised by the Secretary of State in his minute to the Prime Minister of 17 June 1990 (at A). pointed out that building on the Colvin House site would easily be the cheapest option. The Prime Minister (at B) thought this a good outcome, as did the Chief Secretary (at C) who also warned about the PES implications of the potential bid for the construction costs. As a result of
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COVERING CONFIDENTIAL
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