TNAG-2959-FCO40-4238-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 62

CONFIDENTIAL MANAGEMENT IN CONFIDENCE

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045007

MDHIAN 5190

CONFIDENTIAL

MANAGEMENT IN CONFIDENCE

FM BTC HONG KONG

HKD ABB/2

RF

TOP COPY QUIST ?

13 JAN 1993

TO DESKBY 12140OZ FCO TELNO 11

>

INC

OF 12120OZ JANUARY 93

CONFIDENTIAL FOR TRANSMISSION PURPOSES ONLY

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YOUR TELNO 2: FUTURE CONSULATE GENERAL: BUDGET IMPLICATIONS.

1. THANK YOU FOR THIS ACCOUNT OF THE PRESENT POSITION AND THE VIEWS OF THE STEERING COMMITTEE ON THE SCOPE FOR REDUCING COSTS.

2.

MY COMMITTEE WAS INTERESTED TO NOTE FROM ALEX SMITH'S MINUTE OF 10 DECEMBER TO HKD THAT CONSIDERABLE SAVINGS HAVE ALREADY BEEN ACHIEVED BY MEANS OF CHANGES TO SPECIFICATION LEVELS/RATES FOR THE VARIOUS EXTERNAL AND INTERNAL FINISHES. AS A RESULT OF THESE CHANGES, THE DRAFT ESTIMATE PROVIDED BY WIDNELL, THE CONSULTANT QUANTITY SURVEYOR, WAS REDUCED FROM POUNDS 43.74 MILLION TO 29.68 MILLION A REDUCTION OF ALMOST ONE THIRD.

3. MEMBERS FOUND THIS PIECE OF INFORMATION SOMEWHAT PERPLEXING. A NUMBER OF QUESTIONS AROSE:

A> WE WERE INFORMED BY STEVE WHITTLE AT OUR MEETING WITH HIM IN HONG KONG ON 7 DECEMBER AND BY CLIVE NEWEY IN HIS FAX OF 30 NOVEMBER THAT WHILST NO PRECISE ESTIMATES EXISTED, IT WAS NOT ENVISAGED THAT THE 'UNACCEPTABLE' INCREASE OVER BUDGET WOULD RESULT IN REDUCING THE SCOPE OF THE BUILDING. YET IT SEEMS FROM ALEX SMITH'S MINUTE THREE DAYS LATER, OF 10 DECEMBER THAT WIDNELL HAD PRODUCED A DRAFT ESTIMATE THAT WAS DRAMATICALLY HIGHER THAN THE PES BID, AND THAT SUBSTANTIAL CHANGES TO ITS SPECIFICATIONS AND DESIGN WOULD BE NECESSARY: IT IS ALSO CLEAR THAT BETWEEN 5 AND 9 DECEMBER, DISCUSSIONS WERE BEING HELD IN HONG KONG WITH FARRELL, SWIRES AND OTHERS ABOUT HOW TO REDUCE THE ESTIMATES FROM POUNDS 43.74 MILLION. IT IS DIFFICULT TO ESCAPE THE CONCLUSION THAT MY COMMITTEE WAS BEING KEPT IN THE DARK DURING THE VISIT, BUT WE ARE ALL AT A LOSS TO UNDERSTAND WHY.

B) IT IS NOT CLEAR WHEN THE CONSULTANT QUANTITY SURVEYOR PRODUCED HIS DRAFT ESTIMATE OF POUNDS 43.74 MILLION. BUT AS RECENTLY AS (QUERY) JULY 1992, WHEN EVALUATING THE COMPETING