23-DEC-1992 13:04
OED CROYDON
22 December 1992
Mrs Deborah Barnes Jones
HKD
COLVIN HOUSE SITE P.T.G. S.C.14
081 686 4951
P.02
Reference.....
KN
CC:
Mr Bertram
Ms S Brooks
1. In her minute of 18 December Shelagh Brooks concludes that whether HMG is better advised to rely on a written compensation provision or on international law is a financial matter. I tend to think that in theory the financial consequences of resumption by the SAR would be very much influenced by the specific provisions of the PTG and that we should aim to combine both a proper compensation provision and any protection that international law might have to offer at the same time limiting the Directors overall power.
2.
Apart from "at his sole discretion" in lines 3 and 4 the problem with SC14 (b) amended as Mr Hughes suggests lies with the words "depreciated current replacement cost or costs of the building or buildings or parts thereof" which follow. I am not entirely clear as to what that actually means but in any event I do not think it embraces all the potential financial damage HMG could suffer should the SAR exercise its rights. I suggest those words should be replaced by "reimbursement of the cost of reinstatement in equivalent alternative premises and all ancillary costs thereby incurred". In addition I still wish to see "or any part" deleted from SC14 line 2 and the proportion in SC14 (a) revised to one fifty fourth.
3.
Having said all that we are still left with a defective title in that legally our tenure can be brought to an end on just twelve months notice. In my experience this is a most unusual basis upon which to proceed with an extremely costly and important development. The risk of the SAR exercising their rights is not one that I am qualified to judge but I do not believe that the amendments we have been offered give the comfort which, as a diplomatic mission, we sought when the special conditions were first produced. I assume that for the purposes of the submission OED is required to make to Treasury the risk is considered to be an acceptable
one.
D Savage
Manager Area One
bj772.ds
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TOTAL P.02
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