TNAG-2959-FCO40-4238-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 45

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MANAGEMENT IN CONFIDENCE FM FCO

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TO IMMEDIATE BTC HONG KONG TELNO ACCOM 3

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OF 20090OZ JANUARY 93

2 7 JAN 1993

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TIONS FOR

for draft.

FUTURE

FOR SBTC FROM BERTRAM, OED

OUR TELNO 2 AND YOUR TELNO 11: BUDGET-IMPI CONSULATE-GENERAL

1. We obviously understand your concern to know more of the background to the issues covered in first TUR. Please reassure your committee that there has certainly never been any intention of keeping its members in the dark. We are sorry that we were not able to present you - and indeed Mr Hum's Steering Committee - with the full picture at an earlier stage, but reliable information was simply not yet available. We had hoped to avoid making cuts in the building. Once this appeared the most prudent course, we sought to move as fast as possible to prevent decisions on these difficult choices interfering with the critical path. With hindsight, it might have been better to have postponed the 6 January Steering Committee meeting until we had canvassed the views of all concerned (in particular your committee) on proposed cuts. We hope that the information in this telegram will give you a better insight into where we now stand on building costs and how we arrived at this position.

2.

We have asked Swires to pass to you copies of Widnell's Cost Plans (estimates). The first of these (CP1) did indeed estimate the project cost at about 43 million pounds. You wilL recall that when Newey wrote to you on 30 November, he indicated a problem over unacceptably priced estimates. Whittle was right not/not to sound alarm bells when he visited in early December, because the CP1 estimates were pitched to a specification so far from reality as to be meaningless. We saw no advantage in discussing them in their raw state, but instead worked to amend and refine them, putting them into usable form before presentation in London and Hong Kong.

3.

CP1 was

so unrealistic because it was based on finishes and specifications well beyond what we would require even for a good quality building of the type which we all agree the Consulate- General should be: they were estimating for a quote Sultan of Brunei building unquote. As you will see, a Cost Plan is a technical document which does not lend itself to easy interpretation. But comparisons between the summary sheets of CP1 and CP2 will illustrate how we went about cutting the estimates without affecting the quality and how the later Cost Plan did not represent any change to the SOR.

4. Some of the cost reductions were made by setting standards at a more realistic level and others by refinements to the designs.

For example, CP1 estimated site preparation at about 52 million HKD, while CP2 estimates it at under 21 million HKD: the reduction was made by adjusting the location of the car park adjacent to the British Council to a site which would be easier to excavate and therefore less expensive. The big reduction in

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